NEW YORK (Reuters) - The number of applications
Americans filed for mortgage loans jumped last week on a sharp
rebound in refinancing requests after having fallen for nine
straight weeks, according to an industry survey.
The seasonally adjusted gauge for loan applications
to refinance increased 45.5 percent, to 2,883.6, from the previous
week's 1,981.5, the Mortgage Bankers Association of America
The bounce in refinancing demand marked
the biggest increase since January 2001.
Demand for refinancing has fallen sharply in
recent weeks prompted by the upward spike in mortgage rates.
But rates slid on Friday along with Treasury yields following
a poor U.S. payrolls report that showed a surprise decline in
jobs in August, crimping optimism the job market would finally
Friday's drop in Treasury yields pushed average
30-year mortgage rates below 6 percent for the first time since
The index of demand for loans for home purchases
rose to 408.8, up 3.2 percent from the prior week's 396.1. Demand
for loans to buy homes has dropped only slightly in recent months,
supported by strong home sales.
The group said its seasonally adjusted gauge
of overall mortgage requests rose to 771.8 for the week ended
Sept. 5, up 22.8 percent from the previous week's 628.7.
The reading is the highest in four weeks but
still well below the record high of 1,856.7 in the last week
It is unclear whether last week's rise in refinancing applications
to their highest level in a month was a trend reversal or the
last gasp of the unprecedented boom.
Wall Street investment bank Goldman Sachs warned
of weaker consumer spending that could hurt retailers like Home
Depot Inc. and Federated Department Stores in the belief that
the housing turnover is peaking and may decelerate later this
Chief executives at Washington Mutual Inc. and
Countrywide Financial Corp., the No. 2 and No. 3 U.S. mortgage
lenders, said at a financial conference in New York Tuesday
that they saw double-digit declines in mortgage applications
in August versus July.
Economists and the Federal Reserve have
acknowledged the key role of refinancing in supporting the economy
when it turned sour three years ago. Refinancing, spurred by
low interest rates, freed up billions of dollars in cash for
consumers to spend.