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U.S. mortgage applications surge with record low rates

10-03-2012 23:04 BJT

WASHINGTON, Oct. 3 (Xinhua) -- The U.S. mortgage applications last week surged as mortgage rates dropped to new all-time lows, said the latest Weekly Mortgage Applications Survey released Wednesday by the U.S. Mortgage Bankers Association (MBA).

The association said the Market Composite Index of U.S. mortgage applications, a measure of mortgage loan application volume, increased 16.6 percent in the week ending Sept. 28 on a seasonally adjusted basis from the previous week.

The Refinance Index gained 20 percent from the previous week, hitting the highest level since April of 2009, with its share of mortgage activity moving up to 83 percent of total applications. While the seasonally adjusted Purchase Index advanced 4 percent from a week earlier.

The average contract interest rate for 30-year and 15-year decreased to 3.37 percent and 2.90 percent, respectively. They were both the lowest rates in the history of the survey.

"Financial markets continue to adjust to QE3, as the ongoing presence of the Federal Reserve as a significant buyer of mortgage-backed securities applies downward pressure on rates," said Mike Fratantoni, MBA's vice president of research and economics.

The record low mortgage rates have been playing as an important incentive to house refinancing and buying. With constant modest improvement recently, the U.S. housing crash is said to have reached the bottom.

However, many economists believe the market still needs years to recover entirely as the bottom will be prolonged.

Editor:James |Source: Xinhua

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