Mortgage Purchase Applications Rise, Refinancing Rebounds

Purchase applications for home mortgages rose a seasonally adjusted 4.0 percent in the October 13 week, lifting the year-on-year rate by 2 percentage points to 9.0 percent in what is a positive signal for underlying home sales. Refinancing activity rebounded from an extended slide and was up 3.0 percent from the previous week, but its share of total activity nevertheless fell 0.4 percentage points to 48.6 percent. The week's results included adjustments for the Columbus Day holiday, and on an unadjusted basis, purchase applications fell 6.0 percent compared to the previous week. Interest rates edged lower, with the average rate on conforming 30-year fixed mortgages ($424,100 or less) down 2 basis points to 4.14 percent. The week's strong results bode well for the recovery of a housing market that stumbled during the third quarter, partly as a result of hurricanes. Later this morning, the release of the Housing Starts data for September will give further insight into the nation's housing sector.