WASHINGTON - Surging refinancing activity helped push mortgage applications up 8% last week, as the Federal Reserve's seventh rate cut this year caught consumers' attention, according to the Mortgage Bankers Association's weekly index.
Though the Fed's rate moves do not have a direct effect on mortgage rates, many observers say the heavy media coverage of them reminds homeowners to check their mortgage rates. And coincidentally, average mortgage rates fell last week to their lowest point since October 1998, according to HSH Associates of Butler, N.J. It said that the 30-year fixed rate averaged 7.07%.
For the week ended last Friday, the MBA's seasonally adjusted purchase index, measuring applications for loans, rose to 552.2, from 509.8 the previous week.
Refinancing activity, which had been slowly falling for several months, grew more than 8% in the week, comprising 53.7% of all mortgage applications, compared with 49.7% the previous week. Adjustable-rate mortgage applications increased to 12.6% of total volume, up from 11.7% a week before.