With fixed mortgage rates falling to the lowest level in three months, applications for loans at major U.S. lenders rose to the highest level in three months last week, the Mortgage Bankers Association reported Wednesday.
Total applications - including purchase loans and refinancing loans - increased 2.8 percent week-on-week and were up 19 percent compared with the same week a year earlier.
The number of applications to refinance an existing mortgage increased 3.5 percent to the highest level in 18 months and are up about 46 percent from the prior year. Refinancing loans accounted for 46.2 percent of applications, up a tenth of a percentage point.
The volume of loan applications to buy a home rose 2.2 percent to the highest level in two months. Purchase loans are up about 3 percent from the year before.
By contrast, U.S. home sales are down about 7 percent from the same time last year.
Mortgage rates were mixed.
The average rate for a 30-year fixed-rate loan fell to 6.03 percent from 6.04 percent, while the average rate for a 15-year fixed loan rose to 5.78 percent from 5.73 percent. Average rates for one-year adjustable-rate mortgages rose to 5.86 percent from 5.79 percent.
The spread between a 30-year fixed-rate and a one-year ARM dropped to 0.17 percentage points, the narrowest spread since Jan. 5, 2001. A narrower spread reduces the benefit to a borrower for taking out an ARM over a fixed-rate loan.
The spread was as wide as 2.97 percentage points in the summer of 2003, when ARMs had a slightly smaller share of the market than currently.
Despite the tightening spread, the share of applications that were ARMs increased to 21.9 percent last week from 21.4 percent the previous week.Sphere: Related Content