Americans filed a record number of applications to refinance home mortgages last week, according to a report from The Mortgage Bankers Association (MBA) of America.
The Association's gauge for refinancing for the week ended March 14 hit a record high for a second consecutive week at 9,387, up 5.2 percent from the previous week. The index is more than five times higher than a year ago.
"When home owners perceive that interest rates have bottomed out, they often rush out to refinance," MBA senior economist Phil Colling said in a statement.
The housing sector has been the one consistently bright spot since the U.S. economy softened about 3 years ago. Historically low mortgage rates have sustained a housing boom and a flood of mortgage refinancings, which have enabled consumers to cut borrowing costs and spend more.
The MBA's weekly index gauging overall mortgage applications for the week rose 4.4 percent to 1,673, also an all-time high for a second consecutive week.
The group's seasonally adjusted mortgage index for home purchases was at 347.3, up 0.7 percent from the prior week. While the refinancing index scaled new heights, the purchase index has been bouncing in the low-to-mid 300 range since early February.
"Despite the low mortgage rates and healthy home appreciation, there's a great deal of uncertainties among potential home buyers," Greg McBride, financial analyst at Bankrate.com told Reuters. "It makes them reluctant to commit to make such a big purchase."
Interest rates, excluding fees, on 30-year fixed-rate mortgage loans, the mostly widely held home loan in the U.S., averaged 5.61 percent, up 0.19 percentage point from the prior week's all-time low but 1.5 percentage points below the level a year ago, the MBA said.
The mortgage group's weekly survey, which began in 1990, covers about 40 percent of all home loans made each week by banks, thrifts, and mortgage lenders. (Reuters)
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