Mortgage Applications Get Boost

Falling interest rates are spurring home buyers to apply for mortgages, according to the Mortgage Bankers Association.

Mortgage application volume rose a seasonally adjusted 2.9 percent to 841.4 in the week ended Dec. 12. A week earlier, the index stood at 817.7. The index peaked at 1,856.7 in the week ending May 30, 2003, at the height of the housing boom, the Associated Press reports.

Interest rates have been on the decline in recent weeks, and yesterday's move by the Federal Reserve to slash a key interest rate to a historic low of nearly zero is expected to cause rates to fall even further.

Refinance volume rose 6.5 percent last week, while purchase volume fell 4.5 percent, the trade group said.

--Kim Hart