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US Mortgage Applications Jump

Applications for US mortgages rose last week, with notable gains made in both refinance and purchase loans in a sign that the nation's beleaguered housing market may be stabilizing. According to the Mortgage Bankers Association's index of loan applications, the data increased by 16 percent in the week ended February 4th, the biggest jump in the data since last June.

The gauge fell 6.5 percent in the week prior, which included the President's Day Holiday. The MBA's index of refinancing loans jumped 17 percent compared to the previous week, while its index of purchase loans gained 13 percent, its biggest jump since November.

As the US unemployment rate drops and businesses ramp up hiring, a larger number of Americans may start looking to buy homes, bringing some stability to the industry at the heart of the nation's worst recession since the 1930s. Prices will remain depressed, however, as a flood of foreclosed properties continues to be placed on the market, keeping prices in check.

Mortgage rates, meanwhile, are on the rise. The average rate for the popular 30 year fixed-rate loan increased from 4.84 percent to 4.93 percent last week. Borrowing costs have steadily risen since the 30 year reached a historic low average of 4.21 percent in October. The average rate for a 15 year mortgage remained flat last week at 4.17 percent.

March 9, 2011

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