U.S. mortgage applications to buy homes hit six-month high

January 11, 2017 09:32 AM

Applications for U.S. mortgages to buy a home rose to a six-month high last week as mortgage rates retreated further from more than two-year highs, Mortgage Bankers Association data released on Wednesday showed.

The Washington-based industry group said its seasonally adjusted measure on applications for mortgages for home purchase, a proxy on future home sales, rose 6.1 % to 241.9 in the week ended Jan. 6.

Interest rates on 30-year, fixed-rate conforming mortgages, the most widely held type of U.S. home loan, averaged 4.32 %, lower than the prior week's 4.39 %.

Conforming mortgages are those with balances of $417,000 or less and qualify for guarantees from federal mortgage agencies Fannie Mae and Freddie Mac.

Two weeks ago, interest rates on 30-year conforming mortgages averaged 4.45 %, which was the highest since April 2014.

U.S. home borrowing costs have fallen in step with bond yields due to renewed investor demand for U.S. government debt following a global bond market selloff stoked by fears about higher inflation and federal borrowing under a Trump administration and Republican-controlled Congress.

MBA's seasonally adjusted refinancing index rose 4.4 % to 1,182.3 last week with the refinance share of overall loan activity falling to 51.2 % from 52.2 % the previous week.

The group's seasonally adjusted measure on total mortgage applications rose to 379.2, up 5.8 % from the prior week.

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