NEW YORK (Reuters) - Applications for U.S. home mortgages rose last week, reflecting a jump in demand for home loan refinancing as mortgage rates dropped, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 9.3 percent in the week ended Sept 23.
The MBA’s seasonally adjusted index of refinancing applications rose 11.2 percent, while the gauge of loan requests for home purchases rose 2.6 percent.
Fixed 30-year mortgage rates averaged 4.25 percent in the week, down 4 basis points from 4.29 percent the week before.
“Mortgage rates declined last week, at least partially in response to the Fed’s announcement that they would shift their portfolio toward longer-term Treasury securities, and that they would resume buying mortgage-backed securities,” Mike Fratantoni, MBA’s Vice President of Research and Economics, said in a statement.
The U.S. Federal Reserve last week unveiled a new stimulus plan to support the economy’s recovery and help the mortgage market.
U.S. mortgage rates are linked to yields on U.S. Treasuries and mortgage-backed securities.
Reporting by Julie Haviv; Editing by Diane Craft