Mortgage applications in the U.S. climbed last week from a seven-year low as more Americans sought to refinance out of adjustable-rate loans.
The Mortgage Bankers Association’s index of applications to buy a home or refinance a loan rose 2.8 percent to 432.6 in the week ended Aug. 1 from the prior week, when it reached the lowest level since December 2000. The group’s refinancing gauge also improved from a seven-year low.
Potential home-buyers are holding out for deeper price declines as the biggest housing recession in a quarter century moves toward a third year. Rising lending rates and credit restrictions are further discouraging would-be purchasers, signaling no relief in sight for the housing market.
“Home loans are tougher to get for some borrowers and more expensive for others,” Michael Larson, analyst at Weiss Research in Jupiter, Florida, said before the report. “I expect sales to remain subdued and prices to slump, albeit at a more gradual pace.”
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