) -- 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
, 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,
. 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
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
. Most analysts agree the situation is likely to get worse before it gets better.
Data released this week showed sales of newly-built homes
to a new record-low rate, while sales of existing homes
last month. Both sets of data came in far worse than expected.
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Sales of newly-built homes
last month, the Commerce Department said Wednesday, well below expectations for a rate of 334,000 after a revised
rate of 315,000 in June
On Tuesday the National Association of Realtors said existing-home sales
last month, weaker than the expected rate of 4.72 million units after
a downwardly revised rate of 5.26 million in June
Stocks in the homebuilder sector were mostly in positive territory, seeming to have already priced in the dismal data on new- and existing-home sales. The
SPDR S&P Homebuilders
, an exchange-traded fund that tracks the homebuilder sector, added 1.3% Wednesday morning. The
iShares Dow Jones US Home Construction
Leading the sector higher were shares of
, which added 4% and 3.6%, respectively.
were all up more than 2%.
The housing market saw sales ramp up in March and April as consumers rushed to take advantage of tax credits that offered as much as $8,000 for first-time homebuyers and $6,500 for repeat buyers. Following the expiration of those credits on April 30, the market saw a dramatic decline in demand for the month of May that spilled over into June. Data for July showed a further drop in demand. Lawmakers later extended the deadline to close on a home purchase and still qualify for the tax credit to Sept. 30.
-- Written by Miriam Marcus Reimer in New York.
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