WASHINGTON (9/26/13)--U.S. mortgage applications rose last week, and new-home sales increased in August, according to two separate reports.
Mortgage applications increased 5.5% from one week earlier, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending Sept. 20.
MBA's Market Composite Index, a measure of mortgage loan application volume, rose 5.5% on a seasonally adjusted basis from one week earlier. Unadjusted, the index gained 5%.
The seasonally adjusted Purchase Index rose 7%. The unadjusted Purchase Index went up 5%, compared with the previous week, and was 7% higher than the same week one year ago. The Purchase Index was at its highest level since July.
The Refinance Index increased 5%. The refinance share of mortgage activity was unchanged at 61% of total applications. The adjustable-rate mortgage share of activity was unchanged at 7% of total applications.
In a related matter, sales of new U.S. homes bounced back in August, following the weakest two months this year--indicating that consumers continue to purchase homes despite higher borrowing costs (The Wall Street Journal and Bloomberg.com Sept. 25).
Sales rose 7.9% to a 421,000 annualized pace, after a 399,000 rate in July, the Commerce Department said Wednesday.
The housing recovery will slide to some extent because the rise in mortgage costs is a substantial factor in decisions to purchase homes, Russell Price, a senior economist at American Financial Inc. in Detroit, told Bloomberg. However, tight inventories still will provide an opportunity on the supply side for builders to continue constructing more homes, he added.