Mortgage applications in the US increased from a 12-month low last week, as refinancing rose for the first time since early November, according to the Mortgage Bankers Association’s (MBA) index.
The index also showed that loan applications rose 2.3 percent after declining 3.9 percent in the previous week. While MBA’s purchase index declined, the refinancing gauge increased from the lowest level since January 1.
While an increase in interest rates hampered mortgage refinancing, home-purchase applications dropped 31 percent at end-2010 from high levels in April 2010. Falling home prices, increasing foreclosures and jobless rates hovering at nearly 10 percent mean that any possible recovery in the housing market will take years.
“It doesn’t look good,” said Brian Bethune, chief financial economist at IHS Global Insight in Massachusetts. “With rates moving up, it’s going to be a tough hurdle. We’re still in this sideways, choppy situation.”
Meanwhile, the average rate for 30-year fixed mortgages fell to 4.82 percent last week from 4.93 percent in the previous week, which was the highest level since May last year.