Mortgage application index year's third highest

More U.S. homeowners refinancing, survey shows

July 24, 2005|By BLOOMBERG NEWS

WASHINGTON - An index of mortgage applications rose 1.2 percent to its third-highest-level this year, as more homeowners refinanced, a survey of lenders showed.

The Mortgage Bankers Association's measure of home purchases and refinancing increased to 801.1 in the week that ended July 15, from 791.9 the week before. The index is up 30 percent from the comparable week last year.

Home sales in 2005 will surpass last year's record, the National Association of Realtors predicted this month.

Interest rates within a percentage point of historic lows, easier access to credit and steady job creation are bolstering home sales.

"As long as long-term rates are as low as they are, the fundamentals for housing are going to remain pretty strong," said Celia Chen, a housing economist for Economy.com in West Chester, Pa.

The gauge of applications to refinance existing mortgages rose 2.5 percent to 2,618.2, the third highest this year, from 2,554.3 the week before, the association said.

The index of applications for loans to buy homes decreased 0.1 percent to 488.7, the association said. In the week that ended June 10, the measure was at a record 529.3.

The share of applications to refinance increased to 45.7 percent of all applications, from 45.1 percent for the week that ended July 8.

The share of applications for adjustable-rate mortgages increased to 28.5 percent from 27.9 percent.

Chen said rising rates likely would not crimp the market until the middle of next year.

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