Mortgage applications for U.S. home purchases and refinancing rose last week when long-term borrowing costs dipped, an industry trade group said Wednesday.
The Mortgage Bankers Association's seasonally adjusted index of mortgage applications increased 3.2 percent to 626.1 in the week ended Feb. 23, up from this year's low of 606.6 in the prior week.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, declined 0.03 percentage point to average 6.16 percent, the lowest since it hit 6.13 in the year's first week, according to the MBA.
The MBA's seasonally adjusted purchase index, seen as a timely gauge of home sales, rose 5.2 percent to 401.3 in the latest week, it said.
The group's seasonally adjusted refinancing index advanced 1.2 percent to 1,943.5.
Home price slump continues
The week's results are adjusted for the Presidents Day holiday.
On a four-week moving average, the seasonally adjusted market index is down 0.2 percent to 625.6 and the purchase index is off 0.4 percent to 397, the MBA said.
The state of the U.S. housing sector is critical for determining the health of the economy, most economists agree. Signals have been mixed.
Some economists suggest the swift slump following a record five-year surge in home sales and prices is near its end, while others say the correction has not yet been deep enough.
Sales of existing homes in January staged their biggest gain in two years, boosted by unusually warm weather, according to the National Association of Realtors on Tuesday.
Freddie Mac moves to avoid risky mortgages
The housing market is unlikely to enjoy a sustained upturn with a glut of homes on the market.
Inventories of unsold existing homes in January remained high at a 6.6 months' supply based on the current sales pace.
Builders for months have been slicing prices and offering incentives to lure buyers and pare inventory.
The national median existing home price fell nearly 5 percent in January to $210,600 from $221,600 the prior month, and was 3.1 percent less than January 2006, the NAR reported.