Mortgage Applications Rise, Thanks to Low Interest Rates

Demand for mortgage loans rose last week, driven by low interest rates.

The Mortgage Bankers Association said its Market Composite Index rose 5.8% on a seasonally adjusted basis from a week earlier. The index measures the volume of applications for loans. Demand for loans for new homes gained 5.5%, while the number of applications for loans to refinance rose 6%.

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"The increases in purchase applications we have seen over the past couple of weeks align with the better-than-expected news from October's employment report and other data indicating some improvement in the economy's growth prospects," said Michael Fratantoni, MBA's vice president of research and economics. "Refinance applications increased as rates continued to hover near record lows."

The average contract interest rate for 30-year fixed-rate mortgages was 4.28%. The average for 15-year fixed-rate mortgages was 3.64%.