Mortgage Applications Rise Despite Higher Rates

Mortgage applications for home purchases climbed last week, even as rates continued to rise, the Mortgage Bankers Association reports in its weekly mortgage market survey.

Loan applications for home purchases, viewed as a key indicator of future home sales, grew 0.7 percent for the week ending Aug. 2. Mortgage applications for home purchases had fallen four of the past five weeks, according to the MBA.

Overall, the MBA’s index, which includes both refinancing and home purchase demand, increased 0.2 percent for the week. Applications for refinancing, the largest share of that index, fell 0.1 percent last week. The higher costs of refinancing have prompted fewer home owners to refinance in recent weeks.

Fixed 30-year mortgage rates increased last week to a 4.61 percent average, up 3 basis points over the previous week, the MBA reports. Since early May, rates have increased more than 1 percentage point. However, rates still remain low by historical standards.

Source: “U.S. mortgage applications rise, but so do rates: MBA,” Reuters (Aug. 7, 2013)