Jump in US mortgages but demand for new loans falls

City A.M. Reporter
THE NUMBER of US mortgage applications went up last week as lower fixed rates increased the call for refinancing, but demand for new home loans fell to a nine-year low.<br /><br />Average 30-year mortgage rates fell 0.07 percentage point to 4.9 per cent in the week ended November 6, making a new run toward the record low of 4.61 percent set in March, the Mortgage Bankers Association said.<br /><br />Total mortgage applications rose 3.2 percent to a seasonally adjusted 627.5, spurred by an 11.3 per cent jump in refinancing requests.<br /><br />Loan refinancings accounted for 71.5 per cent of all applications, the highest share since the 30-year mortgage rate was at about 4.7 percent in May. Purchase applications slid 11.7 per cent in the week to 220.9, the lowest reading since December 2000.<br /><br />&ldquo;The purchase market is muddling along,&rdquo; with unemployment at a 26-year high of 10.2 percent and mortgage credit still difficult to obtain, said Melissa Cohn, president of The Manhattan Mortgage Company.<br /><br />The $8,000 (&pound;4,800) first-time buyer tax credit has been extended to cover mortgage loans that close by end of June 2010, rather than the end of this month. Income levels for eligible buyers were raised and the programme was expanded to include a $6,500 credit for move-up buyers.