Mortgage Applications

The Mortgage Bankers Association will report its weekly index of home-loan application volume at 7 a.m. EST. The index soared last week to its highest level since July 2005 as consumers sought to take advantage of rates that had dropped in November to a more than two-year-low. For the week that ended Dec. 7, the trade group’s seasonally adjusted index of mortgage application volume rose 2.5 percent to 811.8. Refinance volume rose 4.3 percent, while purchase volume climbed 1.7 percent.

However, rates have since been on the rise. Freddie Mac, the mortgage company, reported last Thursday that 30-year, fixed-rate mortgages averaged 6.11 percent, up from 5.96 percent a week earlier, the lowest in more than two years. The mortgage bankers’ index, which stood at 100 at its onset in March 1990, is derived from a survey of major lenders representing about half of the U.S. mortgages made each week. It does not include loans originated by nonbank lenders.

The index has fluctuated this year after sinking in June 2006 to 529.6, its lowest level since 2002. It peaked at 1,856.7 in May 2003. The mortgage industry’s recent woes, which started with rising defaults among borrowers with weak credit and spread to better-quality loans, have shuttered dozens of lenders and led others such as Countrywide Financial Corp. to scale back riskier loan operations.