Mortgage Applications Finally Increase

For the first time in five weeks, U.S. mortgage applications increased. According to The Mortgage Bankers Association, its seasonally adjusted index of mortgage application activity for the week ending Jan. 6 increased 9.9 percent - to 600.1 from the previous week’s 545.9.

What accounted for this surge? Interest rates on fixed loans fell to more than a two-month low, spurring a rise in demand for Florida home loans and other types of mortgages.

The group’s seasonally adjusted index of refinancing applications increased 9.9 percent to 1,497.5, compared with 1,363.2 the previous week. The index moved higher for a second consecutive week.

Meanwhile, borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.08 percent, down 0.07 percentage point from the previous week’s 6.15 percent, marking its fifth consecutive weekly decline. Rates were at their lowest level since the week ended Oct. 21, 2005, when they touched 6.06 percent.

The MBA’s seasonally adjusted purchase mortgage index increased 9.3 percent to 457.4 (from the previous week’s 418.3). The index is considered a timely gauge on U.S. home sales. This looks to be the first sign that - as predicted by some Florida home loan lenders - the 2006 housing market should remain healthy.