Purchase Applications Rise for a Third Week

Mortgage applications rose nearly 6 percent last week, as interest rates remained stable and borrowers showed increased demand for both home purchases and refinancing existing mortgages.

Applications for home purchase mortgages were up for a third consecutive week, posting a seasonally adjusted 5.5 percent increase, according to the weekly survey from the Mortgage Bankers Association. Purchase applications are up an average of 1.0 percent a week over the past four weeks and were 33.9 percent higher than the same week one year ago.

Refinance applications rose a seasonally adjusted 6.0 percent from last week, but are down an average of 2.6 percent a week over the past month. Refinances currently make up about four-fifths of all mortgage applications.

"Although mortgage rates were little changed following the Federal Reserve's decision to purchase $600 billion of Treasury bonds over the next eight months, mortgage applications increased last week," said Michael Fratantoni, MBA Vice President of Research and Economics.  "The increases in purchase applications we have seen over the past couple of weeks align with the better-than-expected news from October's employment report and other data indicating some improvement in the economy's growth prospects.  Refinance applications increased as rates continued to hover near record lows."

Average interest rates on fixed-rate mortgages were unchanged from the week before, with the 30-year loan remaining at 4.28 percent and 15-year loan staying at 3.64 percent. Average points paid on the 30-year loan, including origination fees, decreased slightly to 1.05 from 1.07, while remaining unchanged on 15-year loans at 1.08.