U.S. mortgage applications rise 10.9%

WASHINGTON – More mortgage applications were filed last week than the week before nationwide, as falling house prices offset the continuing rise in interest rates, the Mortgage Bankers Association said its weekly report.
For the week ended June 6, the group’s seasonally adjusted Market Composite Index – a measure of mortgage loan application volume – rose to 557.1 points. That represented a 10.9-percent increase from the previous week’s six-year low of 502.3 but a 16.5-percent decline from the same week a year ago.
The MBA’s seasonally adjusted Purchase Index rose 12.8 percent last week to 376.2 points after falling 5.4 percent the week before. Meanwhile, the seasonally adjusted Refinance Index rose 8.4 percent compared with the preceding week to 1,622.1 points, after falling 25.7 percent in the week ended May 30, the MBA said.
Refinancing attempts accounted for 39.8 percent of total applications last week, down from 40.6 percent the week before and 46.1 percent in the week ended May 23. Adjustable-rate mortgages (ARMs) increased, however, to 10.3 percent of applications from 8.7 percent in the week ended May 30 and 9.3 percent in the week ended May 23.
The average contract interest rate for a 30-year fixed rate mortgage rose to 6.24 percent last week from 6.17 percent the week before and 5.97 percent the week ended May 23. Meanwhile, the average rate for a one-year ARM increased to 6.87 percent last week from 6.8 percent the week before, although it remained below the 6.92 percent of the week ended May 23.
“Buyers do seem to be responding to the drop in home prices,” Russell Price, senior economist at H&R Block Financial Advisors in Detroit, told Bloomberg News. But, he added: “Credit availability is much tighter than it was previously and this will delay the sector’s recovery”
The MBA survey, compiled each week since 1990, covers about half of all retail residential mortgage originations nationwide.
The Mortgage Bankers Association 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.