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"record # of Americans to apply to refinance" buck

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Bemis Pownall

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http://reuters.com/financeNewsArticle.jhtm...storyID=2367053By Dan Wilchins

NEW YORK, March 12 (Reuters) - Fresh lows in mortgage rates spurred record numbers of Americans to apply to refinance their home loans last week, a trade group said on Wednesday.

The Mortgage Bankers Association of America said the number of refinancing applications filed last week reached its highest level since the MBA began its weekly survey in 1990, rising 34.9 percent from the previous week.

The housing sector is now just about the only bright spot in the U.S. economy. Low rates have encouraged consumers to buy homes, and have allowed homeowners to refinance their mortgages, which in turn allows consumers to cut financing costs and spend more.

Some economists expect the housing sector to slow down later this year, but so far, the torrid pace continues. Sales of existing homes reached a record monthly pace in January, and although new home sales fell 15.1 percent in January, a cold winter may have had something to do with that, analysts said.

If consumers continue to file applications to refinance mortgages at the rate they have so far this year, 2003 will be another record-breaking year for refinancing, according to MBA data.

"Consumers are still willing and able to take advantage of lower rates," said Gary Thayer, chief economist at A.G. Edwards & Sons in St. Louis, on Tuesday.

Low rates have been one of the key factors supporting the housing market, and rates continue to fall.

The average rate for the most popular home loan in the United States, the 30-year mortgage, fell 0.15 percentage points to 5.42 percent in the week ended March 7, the Mortgage Bankers Association of America said. The previous week's rate had been a record low as well.

The MBA's index of mortgage refinancing rose to 8,920.9 on a seasonally adjusted basis, nearly 30 percent higher than the previous record level of 6,926.9, set in the week ending Oct. 4.

The torrid pace of refinancing helped bring the MBA's index of overall mortgage activity, its market index, up to 1,603.1, also a record. The previous record had been 1,317, also set in the week ending Oct. 4.

Applications for mortgages to buy homes fell 0.3 percent, bringing the MBA's purchase index to 345.0. Home purchasing activity is somewhat less sensitive to fluctuations in interest rates.
 
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