Mortgage Applications Edge Up in Latest Week

By Luciana Lopez

NEW YORK -- Applications for U.S. home mortgages edged higher in the latest week, rebounding from a 13-year low set at the end of last year, an industry group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 2.6 percent to 345.1 in the week ended Jan. 3.

In the week ended Dec. 27, the index had slipped to 336.4, according to the release, the lowest mark since December 2000.

The release covered two weeks of data because of the holidays. Both weeks included holiday adjustments.

The U.S. Federal Reserve said last month it would start pulling back on its $85 billion a month bond-buying program as the economy grows strong enough to stand on its own.

That announcement, %VIRTUAL-article-sponsoredlinks%as well as months of speculation before the Fed actually moved, helped drive yields on benchmark 10-year U.S. Treasury notes about 125 basis points higher last year.

That jump in rates on the 10-year note, which is used as a standard in setting mortgage and other lending rates, has slowed mortgage applications recently.

The rate on fixed 30-year mortgages averaged 4.72 percent last week, the same as the prior week.

The MBA's seasonally adjusted index of refinancing applications rose 4.6 percent. That index hit a five-year low in the week ended Dec. 27, as well.

The gauge of loan requests for home purchases, a leading indicator of home sales, fell 0.5 percent.

The survey covers more than 75 percent of U.S. retail residential mortgage applications, according to MBA.