U.S. Mortgage Applications Jump on Falling Interest Rates

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U.S. Mortgage Applications Jump on Falling Interest RatesU.S. mortgage applications surged last week after a drop in interest rates saw home refinancing rise the most since January 2012.

The Mortgage Bankers Association’s gauge surged 11.6 percent for the period through Oct. 17, the most since January. The index had advanced 5.6 percent a week earlier.

The refinancing index rose 23.3 percent as the purchase applications measure fell 4.6 percent. The percentage of individuals applying for refinancing jumped to 65 percent, the most since mid-December, compared with 58.9 percent a week earlier.

The median rate of the 30-year fixed loan dropped for the fourth straight week to 4.10 percent, a new low since May 2013, compared with 4.20 percent a week earlier. The median of the 15-year mortgage dropped from 3.41 percent to 3.28 percent, reported Bloomberg News.

Meanwhile, retail sales in Mexico grew faster than forecasted in August as improved consumer confidence and job creation fuelled spending. Sales rose 4.4 percent from the previous year, the strongest growth in five months, reported the country’s statistics office.

Economists had forecasted a growth of 2.7 percent, making it the second successive month of retail sales growth.

“Mexico’s economy is back,” Bill Adams, a Pittsburg-based senior international economist at PNC, wrote to clients. “The real estate market dislocation of 2012-2013 is behind us, North American manufacturing is performing well, and Mexico’s unemployment rate fell in the latest September release.”

Mexico created 156,400 new jobs last month, compared with an expected 118,000 jobs, reported the Mexican Social Security Institute nearly a fortnight ago. The economy expanded 1 percent in the April-June quarter from the first quarter. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com