Mortgage Applications Rise

Applications for mortgages, a gauge of future home buying, increased 8.1 percent last week for the week of January 1, according to the Mortgage Bankers Association. The purchase index on an unadjusted basis now stands at 41.9 percent higher than last year, indicating that more eligible mortgagees are taking out loans to buy homes.

The report seems to suggest that, overall, the current low interest rates are spurring economic activity in the housing sector, as refinance activity last week also increased, inching up 3.3 percent from a week earlier. Overall, mortgage applications were up 4.5 percent last week.

For the fifth consecutive week, 30-year fixed-rate mortgages have averaged at historical lows below 4 percent, Freddie Mac reported last week. For the week ending Jan. 5, 30-year fixed-rate mortgages averaged 3.91 percent, with an average 0.8 point, matching the previous record low set a few weeks ago. (Source: National Association of Realtors)