Mortgage Applications Surge, Could Be Deceiving

Washington, DC, December 5, 2007—An increase in financing activity caused mortgage applications in the U.S.to increase by the largest amount in more than three years, according to the Mortgage Bankers Association.

The association’s index of applications grew 22.5% to 791.8, the highest level since July 2005. Refinancing surged 32% and purchases rose 15%.

The increase comes on the heels of the largest drop in mortgage rates since 2003. It may have been enough to convince home owners that it is a good time to refinance.

However, it could also be that tighter lending restrictions are causing homeowners to file more applications.

The refinancing index increased from 2093 to 2761.3, the highest since July 2005.

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