U.S. mortgage applications rose for the first time in three weeks as interest rates edged lower, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended August 22 increased 0.5 percent to 421.6. Mortgage applications during the previous week had fallen to their slowest pace since December 2000.
While last week’s increase was small, the report offers a glimmer of hope for the U.S. housing market, currently suffering the worst downturn since the Great Depression. Significantly tighter lending standards and an unwieldy supply of homes for sale are just some of the factors weighing on the U.S. housing market.
Borrowing costs on 30-year, fixed-rate mortgages, excluding fees, averaged 6.44 percent, down 0.03 percentage point from the previous week.
Interest rates were not far from year-ago levels of 6.41 percent.
The MBA’s seasonally adjusted purchase index rose 0.6 percent to 315.9. The index came in well below its year-ago level of 424.0, a drop of 25.5 percent.
Overall mortgage applications last week were 31.5 percent below their year-ago level. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 0.05 percent to 424.9.
The group’s seasonally adjusted index of refinancing applications increased 0.3 percent to 1,038.0. The index was down 40 percent from its year-ago level of 1,729.6.
The refinance share of applications increased to 35.2 percent from 34.8 percent the previous week. The adjustable-rate mortgage share of activity decreased to 7.9 percent, down from 8.0 percent the previous week.
Fixed 15-year mortgage rates averaged 5.94 percent, down from 5.99 percent the previous week. Rates on one-year ARMs increased to 7.15 percent from 7.07 percent.
While U.S. housing market indexes tend to be volatile, data from the MBA may help gauge how the hard-hit sector is faring.