Mortgage application volume climbs 7.5%

The number of people applying for home loans increased last week despite rising interest rates.

July 9, 2008: 7:32 AM EDT

WASHINGTON (AP) -- Mortgage application volume rose 7.5% during the week ending July 4, according to the trade group Mortgage Bankers Association's weekly application survey.

The MBA's application index rose to 513.4 during the week, from 477.7 a week earlier.

The most recent survey includes an adjustment to account for the Independence Day holiday.

Refinance application volume rose 8.7%, while purchase volume increased 6.7%, on an adjusted basis. Refinance applications accounted for 37.3% of all applications.

The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 513.4 means mortgage application activity is 5.134 times higher than it was when the MBA began tracking the data.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50% of all residential retail mortgage originations each week.

Application volume rose despite an increase in interest rates. The average rate for traditional, 30-year fixed-rate mortgages rose to 6.43% during the week ending July 4, from 6.33% the previous week.

The average interest rate for 15-year fixed-rate mortgages - a popular option for refinancing a home - rose to 5.94% from 5.90%.

Rates for one-year adjustable-rate mortgages rose to 7.24% from 7.14% the prior week.