U.S. mortgage applications rise as rates hit new lows

New York /
Dec.December 14, 2011 09:09 AM

Thanks to a big bump in refinances, U.S. mortgage applications increased 4.1 percent on a seasonally adjusted basis for the week ending Dec. 9, according to weekly data from the Mortgage Bankers Association released today. Unadjusted, the index rose 4.2 percent.

Mortgage applications for purchases fell 8.2 percent, on a seasonally adjusted basis, but refinancing applications compensated for that decline, rising 9.3 percent. Refinancings comprised 79.7 percent of mortgage applications last week, up from 76.0 percent the week before. The adjustable-rate mortgage share of activity decreased to 5.6 percent from 5.7 percent.

In November, mortgage applications for purchases fell in all but one price range from October: loan amounts greater than $729,000. However, year-over-year the top price categories actually showed the biggest decline.

Mortgage rates declined across the board from the previous week, to the lowest rates of the year. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (less than $417,500 under a new law) decreased to 4.12 percent, the lowest rate this year, from 4.18 percent. Jumbo loan rates also reached a new low, falling to 4.47 percent from 4.52 percent. FHA-backed 30-year fixed-rate mortgages hit a new valley at 3.94 percent after sitting at 3.98 percent the week ending Dec. 2. Finally, the average contract interest rate for 15-year fixed-rate mortgages bottomed out at 3.44 percent. — Adam Fusfeld


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