By\u00c2\u00a0Bob Willis\u00c2\u00a0-\u00c2\u00a0Feb 23, 2011 4:00 AM PT<\/p>\n
The number of applications for U.S. mortgages rose last week, led by more refinancing as\u00c2\u00a0mortgage rates<\/a> fell to the lowest level since the end of January.<\/p>\n The Mortgage Bankers Association\u00e2\u20ac\u2122s index of loan applications increased 13 percent in the week ended Feb. 18 after dropping the prior week to the lowest point since November 2008. The group\u00e2\u20ac\u2122s refinancing measure jumped 18 percent and the purchase gauge rose 5.1 percent.<\/p>\n \u00e2\u20ac\u0153Refinancing is more sensitive to fluctuations in rates\u00e2\u20ac\u009d than are purchases,\u00c2\u00a0Paul Dales<\/a>, a senior economist at Capital Economics Ltd. in Toronto, said before the report. Still, he said he expected refinancing to \u00e2\u20ac\u0153remain soft\u00e2\u20ac\u009d with sales at \u00e2\u20ac\u0153historically depressed levels for perhaps two or three years.\u00e2\u20ac\u009d<\/p>\n The average rate on 30-year fixed mortgages dropped to 5 percent as turmoil in the Middle East and North Africa led investors to seek the safety of U.S. Treasury securities, which are benchmarks for some consumer loans, pulling down their yield. Still, mounting foreclosures, falling prices and 9 percent unemployment mean it will take time for demand to pick up.<\/p>\n The 30-year rate fell from 5.12 percent the prior week. It reached 4.21 percent in October, the lowest since the group\u00e2\u20ac\u2122s records began in 1990.<\/p>\n At the current 30-year rate, monthly payments for each $100,000 of a loan would be $536.82, in line with the same week the prior year, when the rate was 5.04 percent.<\/p>\n The average rate on a 15-year fixed mortgage fell to 4.28 percent from 4.34 percent.<\/p>\n The share of applicants seeking to refinance a loan rose to 65.7 percent from 64 percent the prior week.<\/p>\n The housing market is struggling to gain traction after a homebuyers\u00e2\u20ac\u2122 tax credit expired last year and as more properties fall into the foreclosure pipeline. Combined sales of existing and new homes in December were at a 5.61 million annual unit pace, down from a July 2005 record of 8.53 million.<\/p>\n A report from the National Association of Realtors today may show existing home sales fell 1.1 percent to a 5.22 million annualized rate in January, according to economists\u00e2\u20ac\u2122 estimates. Sales of previously owned homes last year totaled 4.91 million, the lowest level since 1997.<\/p>\n Homebuilders are still posting losses. D.R. Horton Inc., the second-largest U.S. homebuilder by stock-market value, on Jan. 27 reported a fiscal first-quarter loss that was wider than analysts projected.<\/p>\n \u00e2\u20ac\u0153I think 2011 will be a marginal, weak year in the homebuilding industry,\u00e2\u20ac\u009d D.R. Horton Chief Executive Officer Donald Tomnitz said during a conference call the same day. \u00e2\u20ac\u0153Given the weak macroeconomic conditions, high levels of existing homes for sale and tight mortgage availability, we remain cautious and realistic in our expectations.\u00e2\u20ac\u009d<\/p>\n The Washington-based\u00c2\u00a0Mortgage Bankers Association<\/a>\u00e2\u20ac\u2122s loan survey, compiled every week, covers about half of all U.S. retail residential mortgage originations.<\/p>\n To contact the reporter on this story: Bob Willis in Washington at\u00c2\u00a0bwillis@bloomberg.net<\/a><\/p>\n To contact the editor responsible for this story: Christopher Wellisz at\u00c2\u00a0cwellisz@bloomberg.net<\/a><\/p>\nRates Fall<\/h2>\n
Builder Losses<\/h2>\n