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UPDATE 1-U.S. home refinancing hits 7-month high as mortgage rates slip -MBA

UPDATE 1-U.S. home refinancing hits 7-month high as mortgage rates slip -MBA
From Reuters - June 14, 2017

U.S. applications to refinance an existing home climbed to a near seven-month peak last week as 30-year mortgage rates fell for a fourth straight week, the Mortgage Bankers Association said on Wednesday.

The Washington-based industry group said its seasonally adjusted index on refinancing rose 9.2 percent from the prior week to 1,494.8 in the week of June 9. This was the highest level since 1,754.2 in the Nov. 18 week.

Declining borrowing costs may encourage more homeowners to seek new loans to either reduce their mortgage rates or borrow against the equity in their homes, analysts said.

"We might see a burst of refinancing activity," said Doug Duncan, chief economist at Fannie Mae in Washington.

Interest rates on conforming 30-year fixed-rate mortgages fell to 4.13 percent, the lowest since the week of Nov. 11, from 4.14 percent the prior week.

Conforming loans are those with balances of $424,100 or less which qualify for guarantees from federal mortgage agencies Fannie Mae (FNMA.PK) and Freddie Mac (FMCC.PK).

Average rates on other types of 30-year loans the MBA tracks were 0.01 to 0.02 percentage point lower than the prior week.

Home borrowing costs have fallen in step with bond yields as recent economic data raised doubts whether inflation would be stuck below the Federal Reserve's 2 percent goal for longer than previously thought.

On Wednesday, benchmark U.S. Treasury yields US10YT=RR fell to 2.11 percent, their lowest level since Nov. 10, in reaction to data that showed consumer inflation rose less than what traders had expected for a third straight month in May.

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