US Mortgage Applications Hit 4-Month High

Due to the higher demand in refinancing and lower interest rates, the US home mortgage index surged to its record levels last week, the highest in four months, the Mortgage Bankers Association said on Wednesday.

A new data released by an industry group on Wednesday showed that the number of home mortgages in the United States surged to a four-month high last week, fueled by higher demand in refinancing and lower interest rates.

In a report, the Mortgage Bankers Association (MBA) said that the mortgage application index – including refinancing and home purchases – has increased by 15.5 percent in the week that ended July 15. It was the biggest increase for the industry since early March 2011.

Michael Fratantoni, MBA vice president for research and economics, attributed the gains to the ongoing turmoil in the financial markets affected by the debt crisis in Europe, which has brought down current mortgage rates to its lowest levels this year.

“Refinancing application in the US have surged in response to the ongoing European debt crisis, which has pulled down interest rates at its lowest rate this year,” Fratantoni said in the statement.

Based on MBA’s seasonally adjusted index, the number of refinancing applications increased by 23.1 percent during the period. However, new requests for home purchases slowed down by 0.1 percent.

The executive ala said that the share of refinancing in the overall mortgage activity hiit 70.1 percent, up from the previous week’s 65.6 percent.

Also, the fixed 30-year mortgage rates stabilizes at 4.54 percent from 4.55 percent, Fratantoni said.

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