Americans Defy Recession with Surge in Mortgage Applications

10 January 2002

In a sign that the confidence of US consumers may be picking up, mortgage applications jumped sharply last week, according to the Mortgage Bankers Association of America.

The body’s index of mortgage purchasing surged 27.9% for the seven days to January 4, hitting a seasonally adjusted 375.9 – the highest reading since the survey began twelve years ago.

Such findings suggest consumers are not afraid to buy expensive items such as cars and homes, despite the recession.

“The numbers look much stronger the last couple of weeks,” commented James O’Sullivan, a UBS Warburg economist. “Housing is a more timely economic indicator and it has held up well. The report shows that the recession is a business-led one.”

In addition, the index for home refinancing – which has an extra bonus for the economy in that it hands consumers cash they can spend elsewhere – soared 32.6% last week to 1,703.7.

News source: Financial Times