Mortgage requests rise 7.7%

Gauge at 4-month high

applications to buy homes up 7.4%

September 12, 2004|By BLOOMBERG NEWS

U.S. mortgage applications rose last week to the highest level in four months as interest rates near their lowest this year spurred purchases, a private survey found.

The Mortgage Bankers Association's gauge of loan applications increased 7.7 percent to 692, the highest since the week that ended May 7, from 642.7 a week earlier, the Washington-based association said in a statement.

Applications to purchase homes rose 7.4 percent to 476, close to the record of 501.6 reached in January. Thirty-year fixed mortgage rates below 6 percent since the end of June have kept demand strong and boosted prices.

"Increases in house prices over the past few years have lifted the net asset position of homeowners and provided some support for consumer spending," said Bruce Kasman, economist at J.P. Morgan Securities Inc. in New York. "Mortgage rates remain near their lows for this expansion, and there is no indication of a general slump in house prices."

A report last week said the nation's homeownership rate increased from 68.6 percent to 69.2 percent in the second quarter, the highest since recordkeeping began in 1965, the Commerce Department said.

The bankers group's measure of applications to refinance rose 8 percent to 1,948.9 from 1,804.1 the previous week. Applications to refinance loans made up 41.4 percent of mortgage business last week, up from 40.7 percent the week before.

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