US mortgage applications surge 6.9%

US mortgage applications surged by 6.9% in the week ended 2 August, according to the Mortgage Bankers Association, the sharpest increase in almost two months, erasing the prior two week's declines.

Applications to refinance a mortgage soared almost 16%, while applications to purchase a new home ticked up just 1%.

The rebound in applications came alongside a 27 basis point drop in the average mortgage rate for 30-year contracts, which pushed borrowing costs to their lowest level in more than a year.

Reporting by Iain Gilbert at Sharecast.com