More Americans sought out mortgages last week, filing more applications than the prior week's level which was the lowest in nearly a year and a half, a U.S. mortgage industry group said on Wednesday.
The Mortgage Bankers Association said its widely watched mortgage market index, a measure of mortgage loan demand, for the week ending Dec. 12 climbed 12.6 percent from the the prior week to 677.2.
While this year's record borrowing wave peaked during the late spring, there are still plenty of consumers enticed by historically low rates of adjustable-rate loans, whose rates could run more than 2 percentage points below fixed-rate mortgages, lenders said.
"We are seeing a lot of adjustable-rate demand," said Bob Walters, vice president at Quicken Loans in Livonia, Michigan. "Short-term rates are still so low."
Interest rates on 30-year fixed-rate loans, the most popular U.S. mortgage type, averaged 5.71 percent excluding fees last week, down 5 basis points from the prior week.
Rates on one-year adjustable-rate mortgages, excluding fees, averaged 3.46 percent last week, 11 basis points lower than the previous week, the mortgage industry group said.
Both new loan requests to refinance and to buy a home rose last week from the previous week. The mortgage group's purchase loan index increased 9.4 percent last week to 437.2, and its mortgage refinance index jumped 16.8 percent to 2,072.9.
Going forward, demand for loans to buy homes will support the lending industry, as refinancing activity has receded from its record high set in late spring.
In a sign that housing demand has not softened, U.S. single-family home construction climbed 4.5 percent to a fresh record high to an annualized rate of 2.07 million units in November, the government said on Tuesday