Applications for home mortgages climbed for a third straight week as more borrowers sought to refinance loans on which payments may be about to rise, an industry group said on Wednesday.
The increase was led by the seasonally adjusted index of applications for home refinancings, which jumped 4.6 percent to 1,962, the highest level since May 18, the Mortgage Bankers Association said.
The group's gauge for home purchase applications edged 0.9 percent higher to 452.0 last week, the MBA said.
The indexes underscore a growing urgency among the estimated 5 million homeowners with adjustable-rate mortgages slated to reset at higher rates over the next 18 months.
Refinancings accounted for 43.5 percent of all applications last week, up from 42.1 percent, the MBA said. But the indexes may overstate activity since borrowers are submitting multiple applications to combat the tightening credit conditions by lenders across the country, economists said.
"Potential home buyers are submitting multiple applications and are finding it increasingly difficult to secure financing," said Stephen Wood, an economist at Insight Economics in Danville, California. High inventories of unsold homes will continue to sap the housing market and U.S. economy, he said.
A government report on Wednesday said housing starts in August fell to their lowest level in more than 12 years. Building permits also fell more than expected. For details, see: (ID:nN19240547)
A survey by Campbell Communications earlier this month found 57 percent of homeowners trying to refinance their loans in August were turned down.
Fixed 30-year mortgage rates rose 4 basis points to 6.29 percent last week, the MBA said. The rate on one-year adjustable mortgages increased to 6.39 percent from 6.34 percent.