Refi attempts drive up mortgage applications

WASHINGTON – Mortgage applications nationwide rose last week, led by an increase in refinancing applications, according to a report today from the Mortgage Bankers Association.
The MBA’s Market Composite Index – a measure of mortgage loan application volume – rose to 673.2 points for the week ended Sept. 14, a seasonally adjusted increase of 2.4 percent from the week before. Compared with the same week a year ago, the index rose 12.8 percent.
The group’s seasonally adjusted Refinance Index rose 4.6 percent last week to 1962.0 points, while the Purchase Index edged up 0.9 percent to 452.0.
Refinancing accounted for 43.5 percent of loan applications, up from 42.1 percent the previous week. Adjustable-rate mortgage activity continued to decline, falling to 12.6 percent in the week ended Sept. 14 from 13.2 percent the week before.
Interest rates rose, with the average 30-year fixed-rage mortgage costing borrowers 6.29 percent, up from the previous week’s 6.25 percent, while the average one-year ARM went for 6.39 percent, up from 6.24 the week before.
“Housing activity remains very weak, with prospects inhibited by tighter financial conditions,” Peter Kretzmer, senior economist at Banc of America Securities LLC in New York, told Bloomberg News before the report. Mark Zandi, chief economist at Moody’s Economy.com agreed, telling a conference yesterday in New York that problems in the housing market are “very deep,” and likely to continue through next year.
The Mortgage Bankers Association, based in Washington, D.C., is a trade group representing the real estate finance industry. Its 3,000 member companies include mortgage firms, commercial banks, thrifts, life insurance companies and others. Additional information, including the MBA’s Weekly Application Survey, is available at www.mortgagebankers.org.