Mortgage applications rise 9.6 percent

July 10, 2005|By BLOOMBERG NEWS

WASHINGTON - Mortgage applications rose as home purchases rebounded to the third-highest level on record in the last week of June and refinancing increased, a survey of lenders showed.

The Mortgage Bankers Association's index of all mortgage applications rose 9.6 percent to 853.4 in the week that ended July 1. The measure of applications for loans to buy homes jumped 9.1 percent to 520.8. In the week ended June 10, the index was at a record 529.3.

Rising incomes and interest rates that have held below 6 percent for all but one week this year may produce a fifth straight record year for housing. Housing demand that helped bolster the economy in the first quarter is carrying into the second half and driving economic growth, economists said.

"All of the housing data have shown such a broad pattern of strength, and we see little risk of that pattern breaking any time soon," said Mike Englund, chief economist at Action Economics LLC in Boulder, Colo., before the report. Housing demand "is a reflection of the strength in the economy."

Applications to refinance mortgages rose 10.2 percent, bringing the index to 2,788.2. The share of applications to refinance increased to 45.7 percent of all mortgage applications from 45.4 percent the previous week.

The share of applications for adjustable-rate mortgages rose to 30.7 percent from 30 percent of total applications the previous week.

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