Lower Rates Prompt More Mortgage Applications

Reuters
Updated
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By Caroline Valetkevitch

NEW YORK -- Applications for U.S. home mortgages rose last week as interest rates declined, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 0.9 percent in the week ended May 16.

The MBA's seasonally adjusted index of refinancing applications rose 3.8 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 2.8 percent.

Fixed 30-year mortgage rates averaged 4.33 percent in the week, the lowest rate since November 2013. It was down 6 basis points from 4.39 percent the week before.

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