U.S. mortgage applications rise, as interest rates reach historic lows

December 12, 2012 03:00PM

The number of mortgage applications during the week ending December 7 increased 6.2 percent on a seasonally adjusted basis and 6 percent on an unadjusted basis, the Mortgage Bankers Association announced today.

The Refinance Index grew 8 percent from last week, reaching its highest level since the week ending October 12, 2012, while the seasonally adjusted Purchase Index grew by 1 percent from one week earlier. Unadjusted, however,  the Purchase Index fell 4 percent from last week, but was 4 percent higher year-over-year. The share of refinancing activity increased to 84 percent of total applications. The adjustable-rate mortgage share of activity held at 3 percent of total applications.

“Continued uncertainty due to the lack of resolution regarding the fiscal cliff led interest rates lower last week, with mortgage rates reaching a new low in our survey,” Mike Fratantoni, MBA’s Vice President of Research and Economics, said. “Refinance activity increased, with the refinance index hitting its highest level in two months, and the refinance share reaching its highest level since January 2009. Applications for purchase increased for the fifth consecutive week, and are running almost 10 percent above their level at this time last year.”

Interest rates for 30-year fixed-rate loans with conforming balances decreased 3.47 percent, the lowest rate in the history of the survey, from 3.52 percent. Jumbo loan rates decreased to 3.77 percent from 3.79 percent. Rates for Federal Housing Administration-backed 30-year fixed-rate loans decreased to 3.32 percent, the lowest rate in the history of the survey, from 3.34 percent — Christopher Cameron