The Mortgage Bankers Association's index of applications to buy a home or refinance a loan increased 5.5 percent to 707.3, the highest this year. The group's refinancing gauge rose 6.4 percent and its purchase index climbed 4.8 percent. Even with the rise, economists foresee little chance of recovery in the two-year housing slump until at least mid-2008, as stricter lending practices and a glut of unsold homes for sale prompt buyers to wait for further prices declines."We look for the housing market to continue to restrain growth through deeper construction cuts and weaker consumption,'' Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, said before the report. Subprime mortgage foreclosures will cut U.S. home values by $223 billion, the Center for Responsible Lending said in a report yesterday. Homeowners living near foreclosed properties will see their property values fall $5,000 on average and about 44.5 million houses will be affected, the Durham, North Carolina-based non-profit research group said. The average rate on a 30-year fixed loan rose to 6.19 percent from 6.16 percent the prior week, the mortgage bankers said. At that rate, monthly borrowing costs for each $100,000 of a loan would be about $611.82, compared with $615.07 a year ago, when the rate was 6.24 percent. The average rate on a 15-year fixed mortgage was unchanged at 5.77 percent, while the rate on a one-year adjustable mortgage rose to 5.98 percent from 5.94 percent. Applications to refinance loans rose to 50.1 percent, compared with 49.1 percent the prior week, the bankers said.
