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Demand for Mortgages Rises as Rates Fall

Interest charge lowest since May, with Fed likely to cut further

By Nick McMaster, Newser Staff

Posted Sep 12, 2007 11:23 AM CDT

(Newser) – Applications for home loans increased for the second week in a row as interest rates on both fixed and adjustable-rate mortgages fell, according to a survey by the Mortgage Banker's Association. Indices tracking applications for both purchases and refinancing showed a 5.5% increase over last week and a 12.5% jump from year-ago level, Reuters reports.

The cost for a 30-year, fixed-rate mortgages fell to 6.25%, the lowest since it stood at 6.23% in mid-May. Investors appear to be optimistic the Federal Reserve will cut its benchmark rate during its Sept. 18 meeting. The outlook for the housing market remains weak, Reuters says, suggesting recovery isn't imminent.

[Images (3)]

[Videos (1)]

Mortgage applications have risen for the second straight week, fueled by a demand for home loans. (Shutterstock.com)

A home in Carmel, Ind. is listed as a pending sale, Thursday, Aug. 30, 2007. (AP Photo/Michael Conroy) (Associated Press)

The Mortgage Bankers Association reported that its seasonally adjusted index of mortgage applications rose 5.5 percent for the week ending September 7. (Shutterstock.com)

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Demand for Mortgages Rises as Rates Fall