Mortgage applications increase

U.S. mortgage applications surged last week, with demand hitting its highest level in nearly four years as interest rates plunged, an industry group said.

The Mortgage Bankers Assn. said its seasonally adjusted index of mortgage applications to buy a home or refinance a loan surged 28.4% to 906.4, its highest since the week ended April 2, 2004.

The group said rates on 30-year fixed mortgages, excluding fees, averaged 5.62%, down 0.11 percentage point from the previous week and the lowest since the week ended July 1, 2005, when they averaged 5.58%.

Overall mortgage applications last week were 35.9% above their year-earlier level. The four-week moving average of mortgage applications was up 10.1% to 687.5.