Mortgage apps climb for third straight week

NEW YORK (CNNMoney.com) -- Mortgage applications climbed for the third straight week, according to the latest report by the Mortgage Bankers Association, helped by an increase in both refinancing and purchasing activity.

The industry group's seasonally adjusted index of mortgage applications rose for the second straight week, climbing 3.6 percent to 680.7 in the week ended May 4, from 657.2 one week earlier.

The four-week moving average, which smoothes out volatility in the weekly figures, rose 1.3 percent.

The MBA's refinancing applications index jumped 4.9 percent to 2115.2 from 2015.8 the previous week. The seasonally adjusted purchase index, viewed as a key measurement of U.S. home sales, rose 2.6 percent to 438.3.

Mortgage applications have headed higher in recent weeks, despite the recent crisis in the subprime mortgage sector, which has fueled concerns that lenders may clamp down on loans to borrowers with weak credit.

The subprime fallout weighed on the housing sector in March, as existing home sales tumbled nearly 5 percent, the National Association of Realtors reported Tuesday.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.1 percent, down from 6.14 the previous week.

Fixed 15-year mortgage rates slipped to 5.82 percent from 5.83 the previous week. Rates on one-year adjustable-rate mortgages (ARMs) fell to 5.71 percent from 5.79 percent.

The ARM share of activity rose 18 percent of total applications from 17.9 percent the week before.

The MBA's survey covers about 50 percent of all U.S. retail residential mortgage loans. Respondents include mortgage bankers, commercial banks and thrifts.