WASHINGTON ( TheStreet) -- Mortgage applications rose for the fourth straight week, with refinancing applications once again making up the bulk of applications.
Mortgage applications rose 4.9% in the week ended Aug 20, the Mortgage Bankers Association said early Wednesday. The increase was led by a 5.7% jump in refinance applications, while loan applications for home purchases edged up by 0.6% week-over-week.
Refi applications accounted for 82.4% of all applications last week, up from 81.4% in the prior week, and the highest share observed since January 2009.
"Mortgage rates dropped to their lowest level in the survey, going back to 1990, as incoming data continue to indicate that economic growth has slowed," said Michael Fratantoni, MBA's vice president of research and economics. "We are at a new 15-month high for the refinance index. With rates this low, many borrowers who refinanced in the past two years may well have an incentive to refinance again, and this is likely increasing refi application activity."The average rate on a 30-year fixed mortgage fell to 4.55% last week, the MBA said. It was the lowest rate ever recorded in the survey, falling from 4.6% in the prior week. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.91%, from 3.99% in the prior week. Record-low and near-record-low Mortgage rates have failed to spark demand for housing in recent months, but clearly had an effect on homeowners looking to lower their monthly payments. The U.S. housing market continues to struggle and has been under tremendous pressure for some time. Demand fell further after the springtime expiration of federal tax credits for homebuyers. Most analysts agree the situation is likely to get worse before it gets better. Data released this week showed sales of newly-built homes fell 12.4% in July to a new record-low rate, while sales of existing homes plummeted 27.2% last month. Both sets of data came in far worse than expected.