Mortgage applications surge in week

March 26, 2009|Associated Press

WASHINGTON - Mortgage applications surged last week, coming mostly from borrowers looking to refinance at sharply lower rates after the Federal Reserve unveiled plans to buy Treasury bonds and mortgage-backed securities.

The Mortgage Bankers Association said yesterday its weekly application index climbed 32.2 percent for the week ended March 20. The index came in at 1,159.4, up from 876.9 a week earlier. On an unadjusted basis, the index rose 31.4 percent compared with the previous week, the trade group said.

About 78.5 percent of applications came from borrowers seeking to refinance home loans at lower rates, rather than purchase homes. The refinance rate was up from 72.9 percent in the prior week, the group said.

Refinance volume jumped 41.5 percent while purchase volume edged up 4.2 percent.

The average rate for traditional, 30-year fixed-rate mortgages dipped last week to 4.63 percent from 4.89 percent a week earlier, according to the report.

The average rate for 15-year fixed-rate mortgages slipped to 4.48 percent from 4.52 percent a week earlier, while the average rate for one-year adjustable-rate mortgages rose to 6.22 percent from 6.20 percent.

The trade group's application index remains below its peak of 1,856.7, reached in May 2003.