Wednesday, September 28, 2011

Mortgage News


The number of mortgage applications filed in the U.S. last week rose 9.3% from the prior week, the Mortgage Bankers Association said Wednesday, as interest rates continued to slide following the Federal Reserve's latest stimulus measure.

Refinance activity climbed 11%, according to the MBA's weekly survey, which covers more than three-quarters of all U.S. retail residential mortgage applications. Purchasing grew by a seasonally adjusted 2.6% during the week ended Friday.

Borrowers have reacted cautiously to extremely low interest rates over the past few months, while tighter lending requirements continue to pressure new applications. But mortgage activity picked up last week after the Fed's latest move, dubbed Operation Twist, helped push rates even lower. The move was designed to help lower long-term interest rates by buying up more mortgage-backed securities.

The share of applications filed to refinance an existing mortgage rose to 79.7% of total applications from 78.3% the previous week. It was the highest share since the survey changed its benchmark in January.

The four-week moving average for all mortgage applications is up 1.96%.

Adjustable-rate mortgages made up 6.1% of activity last week, down from 6.7% a week earlier.

The average rate on 30-year fixed-rate mortgages with conforming loan balances edged down to 4.25% from 4.29%, while rates on similar mortgages with jumbo loan balances decreased to 4.51% from 4.55%. The average rate on FHA-backed 30-year fixed-rate mortgages slipped to 4.05% from 4.07%.

Meanwhile, the average for 15-year fixed-rate mortgages ticked up to 3.47% from 3.46%. The 5/1 ARM average decreased to 2.95% from 2.96%.

-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
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