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US mortgage applications rise
Source: Bloomberg News |
July 21, 2011, Thursday
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Mortgage applications in the United States rose for the first time in a month, led by a rebound in refinancing as interest rates fell.
The Mortgage Bankers Association's index increased 15.5 percent in the period ended July 15 from the prior week, the Washington-based group reported yesterday. The group's refinancing measure jumped 23.1 percent from the prior week, the most since January 2010, while the purchase gauge stagnated, dropping 0.1 percent. The prior week's reading included the July 4 holiday, which may account for recent volatility.
Near record-low borrowing costs may be encouraging homeowners to refinance. At the same time, unemployment above 9 percent and an excess of distressed properties that are holding down prices may be hampering a sustained recovery in housing.
"I look at the purchase index and that number's just been going nowhere for the past two or three months," Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said before the report. The single-family home "market has shown no signs of life yet. Housing prices need to stop dropping before the market starts to improve."
The share of applicants seeking to refinance increased to 70.1 percent last week, the highest since January, from 65.6 percent the prior week.
The average rate on a 30-year fixed loan dropped to 4.54 percent from 4.55 percent the prior week. The average rate on a 15-year fixed mortgage fell to 3.66 percent from 3.68 percent, the report showed.
Recent data indicate the housing market may be stabilizing. Housing starts rose to 629,000 in June, the fastest pace in five months, the Commerce Department reported on Tuesday, as improved weather allowed builders to start work on delayed projects.
At the same time, a surplus of distressed properties in the pipeline may continue to drive home prices down, preventing a consistent recovery.
Smaller payroll gains may also be playing a role. US employers added 18,000 jobs in June, the fewest in nine months, as the unemployment rate climbed to 9.2 percent, the Labor Department reported last week.
Even with a boost in mortgage activity, the housing market is still performing at weaker-than-expected levels, said Keith McLoughlin, CEO of Electrolux AB, the world's second biggest appliance maker.
The Mortgage Bankers Association's index increased 15.5 percent in the period ended July 15 from the prior week, the Washington-based group reported yesterday. The group's refinancing measure jumped 23.1 percent from the prior week, the most since January 2010, while the purchase gauge stagnated, dropping 0.1 percent. The prior week's reading included the July 4 holiday, which may account for recent volatility.
Near record-low borrowing costs may be encouraging homeowners to refinance. At the same time, unemployment above 9 percent and an excess of distressed properties that are holding down prices may be hampering a sustained recovery in housing.
"I look at the purchase index and that number's just been going nowhere for the past two or three months," Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said before the report. The single-family home "market has shown no signs of life yet. Housing prices need to stop dropping before the market starts to improve."
The share of applicants seeking to refinance increased to 70.1 percent last week, the highest since January, from 65.6 percent the prior week.
The average rate on a 30-year fixed loan dropped to 4.54 percent from 4.55 percent the prior week. The average rate on a 15-year fixed mortgage fell to 3.66 percent from 3.68 percent, the report showed.
Recent data indicate the housing market may be stabilizing. Housing starts rose to 629,000 in June, the fastest pace in five months, the Commerce Department reported on Tuesday, as improved weather allowed builders to start work on delayed projects.
At the same time, a surplus of distressed properties in the pipeline may continue to drive home prices down, preventing a consistent recovery.
Smaller payroll gains may also be playing a role. US employers added 18,000 jobs in June, the fewest in nine months, as the unemployment rate climbed to 9.2 percent, the Labor Department reported last week.
Even with a boost in mortgage activity, the housing market is still performing at weaker-than-expected levels, said Keith McLoughlin, CEO of Electrolux AB, the world's second biggest appliance maker.
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