Mortgage index rises with rate dip

December 12, 2004|By BLOOMBERG NEWS

U.S. mortgage applications increased last week as a drop in mortgage rates prompted more people to buy homes. Fewer homeowners refinanced.

The Mortgage Bankers Association's applications index rose 3.4 percent to 696.2 from 673.3 during the prior week. The group's gauge of applications to purchase homes rose to the highest level since the end of October.

The National Association of Realtors expects home sales to reach a record this year, which will help the economy and may drive purchases of appliances and other home furnishings.

"I don't think we're going to see any kind of rate movement in the near term that's going to cause demand for mortgages to fall off dramatically," said Bill Natcher, a senior economist at Wells Fargo & Co. in Minneapolis.

The mortgage bankers group's index of applications to purchase homes rose 6.6 percent last week to 490.9 from 460.3 the week before. The gauge of applications to refinance mortgages fell 1.1 percent to 1,890.6 from 1,912.3.

"Right now in the U.S. we are at an all-time high in homeownership and I don't see that slowing down," said Joseph Tomkinson, chief executive of Impac Mortgage Holdings Inc., of Newport Beach, Calif.

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