NEW YORK – New applications for U.S. home loans rose last week while refinancings surged, as 30-year mortgage interest rates fell to their lowest level in over four months, an industry group said on Wednesday.
The Mortgage Bankers Association (search) (MBA) said its seasonally adjusted market index, a measure of mortgage activity, rose for the week ending August 13 by 11.9 percent to 689.4 from the previous week's 616.1.
The Washington trade group's seasonally adjusted refinancing index jumped by 20.9 percent to 1,982.7 in the week ended August 13 from the previous week's 1,640.5.
"The jump in refinance loans comes after a fairly steady drop in rates over the last month," Jay Brinkmann, MBA's vice president of research and economics, said in a statement.
Thirty-year mortgage rates, excluding fees, averaged 5.75 percent, down 0.05 percentage point from the previous week and down 0.47 percentage point from a year ago. The 30-year rates fell to their lowest level since the week of April 2 when they also averaged 5.75 percent.
"Rates are now about half of a percentage point below where they were this time last year, creating a refinance incentive for many borrowers who have taken out home loans since the middle of last summer," Brinkmann said.
The Washington trade group's purchase index, a gauge of new loan requests for home purchases, rose last week by 6.2 percent to 467.1 from 440.0 in the prior week.
The U.S. housing market is showing continued resiliency. Data released on Tuesday showed U.S. housing starts (search) rebounded sharply in July after a bit of a June slump.
July housing starts jumped 8.3 percent to a seasonally adjusted annual rate of 1.978 million units, above Wall Street expectations and up from a revised June annual rate of 1.826 million, the Commerce Department (search) said on Tuesday.