NEW YORK – New applications for U.S. home loans rose last week to their highest level in four months even though mortgage rates ticked upward from their recent lows, the Mortgage Bankers Association (search) said Wednesday.
The trade group said its seasonally adjusted market index, a measure of mortgage activity, rose for the week ending Sept 3 by 7.7 percent to 692.0 from the previous week's 642.7. The latest reading on weekly application volume is the highest since 742.2 for the week ending May 7.
Thirty-year mortgage rates (search), excluding fees, averaged 5.79 percent, up 0.04 percentage point from the previous week but down 0.20 percentage point from a year ago, the Association said.
The Mortgage Bankers Association's seasonally adjusted index on new refinancing applications rose by 8.0 percent to 1,948.9 for last week from the previous week's 1,804.1. The weekly refinancing index is at its highest in three weeks.
The Washington trade group's purchase index, a gauge of new loan requests for home purchases, rose last week by 7.4 percent to 476.0 from 443.1 in the prior week. The latest purchase reading is the highest since 500.9 for the week ending July 2.
Resilient loan demand for home purchases indicated that U.S. home sales are on track to shatter last year's record, said Frank Nothaft, chief economist at Freddie Mac (FRE).
"Home sales figures remain vibrant and robust," he said.
Nothaft projected that home sales would total 7.65 million units this year, a 6 percent increase from 2003's 7.19 million units.
The refinancing share of mortgage activity rose to 41.4 percent of total applications last week from prior week's 40.7 percent.
The adjustable-rate mortgage share of last week's activity slipped to 32.9 percent of total applications from 33.1 percent the previous week, the group said.