Drop In Mortgage Rates Spur Refinancing Applications

A big drop in mortgage rates -- the result of last week's rate cut by the Federal Reserve -- triggered a surge of refinancing applications that lifted the composite index by 5.3 percent in the August 2 week. The refinance index rose 12.0 percent in the week as the average rate for 30-year conventional mortgages fell 7 basis points to 4.01 percent. Yet purchase applications didn't get a boost from the rate cut, at least immediately. Purchase applications fell 2.0 percent in the week though year-on-year growth, at 7.0 percent, remains solid. Lower mortgage rates should prove to be a mid-year positive for a housing sector that has been struggling to climb to this year.