NEW YORK (Reuters) — U.S. mortgage applications rose for the first time in three weeks as near record-low interest rates spurred demand for home refinancing and purchase loans, data from an industry group showed on Wednesday.
The jump in demand came several weeks after the unveiling of the strongest government action yet to aid homeowners since the housing market’s meltdown began and may help gauge what is in store this spring, the peak home-buying season.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended March 6 increased 11.3% to 723.4.
U.S. President Obama last month announced the Homeowner Affordability and Stability Plan, which is designed to provide much-needed support to the housing market. The goals of the housing plan are to support refinancing for good quality borrowers; help distressed borrowers avoid foreclosure; and stimulate new housing demand through the expansion of Fannie Mae and Freddie Mac , the top two U.S. home funding companies.
Mark Goldman, lecturer of real estate at San Diego State University, said interest rates on mortgages are at enticing levels that could lift demand in the months ahead.
“It does not really matter if interest rates on mortgages move up one week or move down another, they are still at historically low levels,” he said.
“What is important right now is that home affordability has improved and low interest rates help more people afford to buy a home,” he said.