Mortgage applications up again as rates stay below 5%

The highs and lows of the mortgage market continue, however, it might not be all bad for consumers.

The Mortgage Business Bankers Assn. reported today that applications for home loans have increased by 16.4% last week, with refinance and purchase loans up to double digits.

The survey showed the average interest rate for 30-year fixed-rate first time buyer mortgages remained below 5% for the third straight week, dipping to 4.89% from 4.94% a week earlier. That rate assumed the borrowers had good credit and made a 20% or higher down payment.

It looked as though borrowers were trying to maximize the benefit by paying more upfront lender fees, or points, to lower the rates. The corporate bankers groups said the typical points paid rose from 0.94 to 1.13, a point being 1% of the loan.

The 30-year rate was at its lowest level since May, when it was 4.81%. And the rate on 15-year loans continued to fall to all-time lows, dropping from 4.34% with 1.01 points to 4.32% with 1.04 points.