Home loan demand rises as rates tumble in US

NEW
YORK: Mortgage applications rose for a 2nd consecutive week, fueled by demand
for place loans as involvement rates sank to their last since May, an industry
group's figs showed Wednesday. The Mortgage Bankers
Association said its seasonally adjusted index of mortgage applications, which
includes both purchase and refinance loans, rose 5.5 percentage for the hebdomad ended
September 7. Applications were
12.5 per cent above their year-ago level. But the four-week moving norm of
mortgage applications, which smooths the volatile weekly figures, was down 0.8
per cent to 634.2. Borrowing
costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.25 per cent,
down 0.17 per centum point from the former week, their last since the week
ended May 18 when they stood at 6.23 per cent. Interest rates were also below
year-ago flats at 6.32 per
cent. Yields on 10-year US
Treasury notes, which are linked to mortgage rates, drop last hebdomad for a fourth
straight hebdomad to a 19-month low as investors grew more than confident the Federal
Reserve will cut benchmark rates at its policy-making meeting on September
18. The MBA's seasonally
adjusted purchase index rose 5.2 per cent to 448.0. The index was 9.2 per cent
above its year-earlier
level. The group's seasonally
adjusted index of refinancing applications rose to 1,876.6, 6 per cent above the
prior week. The index was up 17.5 per cent from a twelvemonth earlier. REFINANCINGS SHARE
UP The refinance share of
applications increased to 42.1 per cent from 41.4 per cent the previous
week. Last week, fixed 15-year
mortgage rates averaged 5.90 per cent, falling 0.2 per centage point from 6.10
per cent. Rates on one-year
adjustable-rate mortgages (ARMs) decreased to 6.34 per cent from 6.52 per cent. Rates on weaponry drop for the first clip in five
weeks. The arm share of
activity increased to 13.2 percent, up from 12.6 per cent the previous
week. The MBA's study covers
about 50 per cent of all United States retail residential loans. Respondents include
mortgage banks, commercial Banks and
thrifts. Recent United States housing
industry indexes, while volatile, generally point to a weak mentality for the
industry, suggesting a delayed recovery for the hard-hit sector.