U.S. mortgage applications rose last week as record low interest rates lured in an increased number of people refinancing their home loans, data from an industry group showed on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 32.2 percent to 1,159.4 for the week ended March 20. Refinancing accounted for 78.5 percent of all applications. Interest rates on mortgages fell after the Federal Reserve last week said it would buy Treasury securities for the first time in more than four decades as well as more than double its planned purchases of mortgage-related securities, according to Orawin Velz, associate vice president of economic forecasting at the MBA in Washington. “The drop offered a sizable refinance incentive for most homeowners, sparking a pick-up in refinance activity,” Velz said in a statement. Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.63 percent, down 0.26 percentage point from the previous week, reaching a record low, the MBA said. It has been conducting the weekly survey since 1990. Interest rates were well below its 5.74 percent rate from a year ago. Overall mortgage applications last week were 20.0 percent above their year-ago level.
