NEW YORK, Oct 22 - The number of mortgage applications filed by Americans rose slightly last week on an increase in new requests to buy a home even as mortgage rates moved up for a second week, according to an industry survey. The Mortgage Bankers Association of America said on Wednesday its seasonally adjusted gauge of all new mortgage applications edged up 0.5 percent to 652.8 for the week ended Oct. 17 from the prior week's 649.6. The group's index of demand for loans to purchase homes increased to 386.1, up 7.5 percent from previous week's 359. Despite the uptick in mortgage rates, the U.S. housing market which has been crucial for the uneven U.S. economic recovery continued to show strength. This year's record mortgage demand has also boosted the bottom lines of most banks and mortgage lenders. But economists are expecting that higher rates, although still near historically low levels, will eventually cool home sales and construction from their near record levels.
"The housing market continues to exhibit strength. We are seeing some signs of topping out," said Steve Wood, chief economist at Insight Economics in Danville, California. Higher rates have clamped down on refinancings, which has put billions of dollars in consumers' pockets cushioning them against a weak labor market. The association's index of refinancing activities slipped to 2,204.1, down 5.8 percent from prior week's 2,340.1. Interest rates, excluding fees, on 30-year fixed rate mortgages, the most common home loan, averaged 5.97 percent last week, up 16 basis points from the previous week but down 24 basis points from a year ago. "Mortgage rates are higher but not dramatically higher," Wood said.//