U.S. mortgage rates fall to 11-month low

U.S. mortgage rates fell to their lowest level in nearly a year last week, spurring a surge in refinancing activity and prompting potential homebuyers to enter the market. According to data released Wednesday by the Mortgage Bankers Association (MBA), the contract rate on a 30-year fixed-rate mortgage fell 15 basis points to 6.49% in the week ending September 5. Rates on 15-year fixed-rate loans and five-year adjustable-rate loans also fell to their lowest levels in about a year. The decline was large enough to push the MBA's mortgage activity index, which covers both home purchases and refinancings, to a three-year high. If financing costs continue to fall, it will provide much-needed support to the weakening housing market. Residential construction has been a weak spot in the U.S. economy, dragging down gross domestic product (GDP) in four of the past five quarters. The MBA's home purchase application index rose 6.6%, reaching its highest level since the first week of July. The refinance index rose over 12%, reaching its highest level in nearly a year. (Jinshi)