USA Today
NEW YORK (Reuters) — Interest rates on 30-year fixed-rate mortgages hit their highest levels since early December last week, and applications fell for a second week.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended Feb. 3 slid 1.2% to 619.3 from the previous week’s 626.8, following a decline in home sales.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.25%, up 0.05 percentage point from the previous week’s 6.20%, marking a second consecutive weekly increase. Rates were at their highest levels since the week ended Dec. 9, when they reached 6.28%.
The 30-year fixed-rate mortgage, the industry benchmark, is substantially above its 2005 low of 5.47% in late June 2005, but below its 6.33% high the week Nov. 11.
Fixed 15-year mortgage rates averaged 5.84%, up from 5.79% the previous week. Rates on one-year adjustable-rate mortgages (ARMs) were unchanged at 5.48%.
The MBA’s seasonally adjusted purchase mortgage index fell to 425.1 from the previous week’s 435.7. The index is considered a timely gauge on U.S. home sales.
Analysts say an increasing number of borrowers have been converting their ARMs into new fixed-rate loans as the difference between adjustable and fixed mortgage interest rates narrow. This has been a factor behind the recent rise in demand for refinancing.
The group’s seasonally adjusted index of refinancing applications increased to 1,751.0 from 1,747.2 the previous week.
The MBA’s survey covers about half of all U.S. retail residential mortgage originations. Respondents include mortgage bankers, commercial banks and thrifts.
