Mortgage Applications Up Despite Rising Rates 5/04/06
Information for Buyers

Mortgage Applications Up Despite Rising Rates

(May 4, 2006) --   U.S. mortgage applications rose last week for the first time in four weeks despite increasing interest rates.

The Mortgage Bankers Association reported its seasonally adjusted index of mortgage application activity for the week ended April 28 increased 8.8 percent to 596.8 from the previous week’s 548.6.

Borrowing costs for 30-year, fixed-rate mortgages, excluding fees, averaged 6.57 percent, up 0.04 percentage point from the previous week, their highest level since June 2002.

Fixed-rate, 15-year mortgages averaged 6.19 percent last week, up from 6.18 percent the previous week. Rates on one-year, adjustable-rate mortgages rose to 6.08 percent from 5.96 percent a week earlier.

Analysts believe the increase in applications was a temporary blip. “The jump in activity was a little surprising given that mortgage rates have been rising, but on a week-to-week basis the index can be volatile," said David Sloan, senior economist at 4CAST Ltd., New York. "Higher rates will eventually send the index lower."

Source: Reuters News[, Julie Haviv (05/03/06)