Homeowners are rushing to lock in rock-bottom loan rates. Mortgage applications jumped sharply in the Oct. 2 week, up 13.2 percent for purchases and up 18.2 percent for refinancing. The average rate for 30-year mortgages fell for a third straight week, down 5 basis points to 4.89 percent. The bulk of demand is centered in refinancing which is making up two thirds of all applications. Refinancing will help make household debt manageable and help limit foreclosures. Heavy refinancing is also a factor behind the steep contraction underway in consumer credit, a report that excludes debt secured by real estate. Consumer credit data will be posted at 3:00 p.m. ET.
The Mortgage Bankers' Association compiles various mortgage loan indexes. The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
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