Purchasing apps to highest level since May

Mortgage purchasing applications rose 6.3 percent last week to their highest level since May, but activity was 40 percent below its level one year ago and still has yet to return to the levels seen prior to the expiration of the federal homebuyer tax credit in June, according to the latest survey from the Mortgage Bankers Association, for the week that ended Sept. 3. Meanwhile, refinancing applications dropped — by 3.1 percent — for the first time in six weeks as mortgage rates ticked upward after weeks of declines. Still, said Michael Fratantoni, vice president of research and economics for the MBA, “the level of applications to refinance remains close to recent highs, as historically low mortgage rates continue to draw borrowers into the market.” The 30-year fixed-rate mortgage registered a 4.5 percent average contract interest rate, up from the record-low 4.43 percent last week, however, points decreased to 0.96 from 1.34 for 80 percent loan-to-value ratio loans, meaning the effective interest rate decreased week-over-week. Similarly, the interest rate for the 15-year fixed-rate mortgage increased to 4 percent from 3.88 percent week-over-week but effectively declined since points decreased to 0.87 from 1.45 for 80 percent LTV loans. TRD