Mortgage Rates, Loan Applications Rise

(Mortgage rates and loan applications report updated with additional information.)

WASHINGTON ( TheStreet) -- Mortgage applications rose last week even as mortgage rates edged higher.

The volume of mortgage loan applications increased 2.1% on a seasonally adjusted basis in the week ending Nov. 19, the Mortgage Bankers Association said early Wednesday.

Refinancing applications decreased 1% from the previous week to the lowest level observed since late June. New-home purchase loan applications jumped 14.4% from the prior week, which included Veterans Day though no adjustments were made for the holiday.

"The increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation," said Michael Fratantoni, MBA's vice president of research and economics. "While the increase was magnified somewhat by the comparison to the holiday week, the level of purchase applications on a seasonally adjusted basis is now at its highest level since the expiration of the homebuyer tax credit ."

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A total of 78.6% of all loan applications last week were for refinancing existing mortgages, down from 80.3% share observed in the prior week.

Mortgage activity ticked up last week despite higher mortgage rates. The average rate on a 30-year fixed mortgage increased to 4.5% from 4.46% in the prior week. It is the highest rate observed since the week ending Sept. 3, but remains near all-time lows.

Record-low and near-record-low mortgage rates failed to spark robust demand for housing in recent months, but continue to have an effect on homeowners looking to lower their monthly payments through refinancing.

While any mortgage demand can be viewed in a positive light, the still-struggling housing market continues to be plagued by sluggish demand, in part because of the tight credit market and inability of many potential buyers to access the credit they need to finance a mortgage.

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