Home, refinancing markets still hot

USA TODAY, August, 2004 by Barbara Hagenbaugh

WASHINGTON -- U.S. consumers are rapidly increasing home purchases and refinancings in a bid to take advantage of falling mortgage rates, according to data out Wednesday that suggest the red-hot housing market is continuing to defy expectations of a slowdown.

Also Wednesday, mortgage lender Fannie Mae raised its forecasts for home sales and prices in 2004.

The Mortgage Bankers Association said its purchase index rose a seasonally adjusted 6.2% last week to the highest level since the week ended July 9. The refinance index jumped 20.9% to the highest level since the May 7 week. Despite the sharp gain, refinancings were down 28% from a year ago, when a surge in refinancings led to huge backlogs at mortgage brokers.

Consumers are acting in response to an unexpected decline in mortgage rates. The mortgage bankers said the average interest rate on a 30-year fixed mortgage fell to 5.75% ...