US mortgage applications for home purchases rise for fourth week

US MORTGAGE applications for home purchases increased for a fourth week, the longest stretch of gains since March that was aided by a further easing in borrowing costs.

The Mortgage Bankers Association’s (MBA) index of purchase applications rose 4.7 per cent to a two-month high of 144.9 in the week ended Nov 24. The contract rate on a 30-year fixed mortgage fell four basis points to 7.37 per cent, the lowest since mid-September.

While mortgage rates have declined since approaching 8 per cent about a month ago, borrowing costs remain at levels last seen in 2000. That’s discouraging many homeowners who have locked in much-lower rates from moving, limiting the number of listings and keeping home prices high.

Meantime, refinancing activity suffered its biggest drop in six weeks, Wednesday’s (Nov 29) MBA data showed. The limited the gain in the MBA’s overall index of applications to 0.3 per cent.

The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75 per cent of all retail residential mortgage applications in the US. BLOOMBERG