The number of home loan applications in the US climbed 4.9 percent last week, after rising for four consecutive weeks, according to the Mortgage Bankers Association’s index.
Mortgage refinancing jumped 5.7 percent to hit the highest level since May 2009, while home loan purchases rose 0.6 percent.
Lower mortgage rates, which help home borrowers reduce their monthly mortgage obligations, are doing little to stir sales, as the country’s economy faces another wave of foreclosures and increasing jobless rates.
Sales of new homes will likely remain unchanged in July, despite one industry group reporting that purchases of previously owned homes dropped 27 percent.
“Record-low interest rates continue to draw refinancers,” said Michael Bratus, an economist at Moody’s Analytics Inc. in Pennsylvania. “With the unemployment rate holding near 10 percent, we are not going to see any sizable increase in purchase applications.”
30-year fixed-rate mortgages dropped to 4.55 percent from 4.60 percent in the previous week, the lowest level recorded by MBA since 1990.
The monthly payment for an average loan of $100,000 was $509.66, which was $42 less than the previous year when rates were at 5.24 percent.
15-year fixed-rate mortgages also plunged to 3.91 percent from 3.99 percent, while the rate on a one-year adjustable declined to 6.84 percent from 6.90 percent.