U.S. mortgage applications filed last week rose a seasonally adjusted 112.1 percent from the week before, as borrowers rushed to lock in lower rates, according to the Mortgage Bankers Association's weekly survey, which was released today.
The surge in mortgages came after the Federal Reserve announced last week that it would purchase up to $100 billion in direct debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, otherwise known as government-sponsored enterprises (GSEs), along with up to $500 billion of mortgage-backed securities backed by Fannie, Freddie and Ginnie Mae. The government's moves caused mortgage rates to drop.
"Many borrowers missed an opportunity to take advantage when rates dropped sharply for a brief period when the GSEs were placed under conservatorship," said Orawin Velz, associate vice president of economic forecasting for the MBA. "When rates plummeted following the Fed's announcement that it would buy GSE debt and MBS (mortgage-backed securities), many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound."
According to the MBA survey, rates on 30-year fixed-rate mortgages averaged 5.47 percent last week after standing at 5.99 percent in the previous week.
Fifteen-year fixed-rate mortgages averaged 5.13 percent last week, down from 5.78 percent in the week before, and one-year adjustable rate mortgages fell to an average of 6.61 percent last week from 6.87 percent in the previous week.
Applications to refinance existing loans rose 203.3 percent last week compared with the week before. Mortgage applications to purchase a home rose a seasonally adjusted 38.0 percent.
Still, the mortgage application volume last week was down 21.9 percent compared with the same week in 2007.
Today's report was of little consolation to Wausau Homes, which cut 81 jobs from its plant in Rothschild this week.
The company said the reductions will be permanent because the firm does not expect the U.S. economy to improve in the near future.
"This reduction in force is especially painful because the people being let go have contributed significantly to our success and we will miss them tremendously. Wausau Homes has a reputation for having hard working highly skilled people. Any local employer who hires those being let go today will be pleased by their performance," said Tom Schuette, president of Wausau Homes. "Wausau Homes will be providing a severance package that goes beyond our 60-day legal requirement because we feel very strongly that it is important to take care of those who will be leaving."
The company said 163 people will continue to work at the Rothschild facility and 27 people will continue to work at its plant in Waverly, Ohio.

The stock market shrugged off some bleak employment data and an early morning plunge to move back into the black today.
The U.S. private sector shed 250,000 jobs in November, the largest job loss in seven years, according to the ADP national employment index released today. The report may provide a sneak preview of the government's November labor market report to be released on Friday.
Meanwhile, online advertised vacancies declined 70,200 to 4.4 million in November, according to The Conference Board Help-Wanted Online Data Series released today. The November loss brought the decline this fall (September, October and November) to 264,000.
"Online advertised vacancies began slipping in mid-2007, some six months before the official beginning of the recession, and are now at levels that are over 1/2 million below the May 2007 peak," said Gad Levanon, senior economist at The Conference Board. "Some of the largest current decline is in business, financial and management occupations, but labor demand is down as well in a wide range of other jobs such as sales, food service, transportation and repair. Healthcare workers, however, are still in demand."
Locally, the BizTimes Stock Index lost 5.08 points to close at 86.15 Tuesday, even though the Dow Jones Industrial Average gained 270 points. Local stocks recovered some momentum this morning, led by Kohl's Corp. (up $2.09 to $32.79) and A.O. Smith Corp. (up $1.66 to $32.31). The largest local decliners this morning were Koss Corp. (down $1.25 to $10.40) and Orion Energy Systems Inc. (down 55 cents to $3.24).

Aldermen in the City of Oak Creek on Tuesday approved plans to rezone a 64-acre parcel that clears the way for construction of a new state-of-the-art mail processing and distribution center for the U.S. Postal Service.
The vote in favor was 5-1. The 858,000-square-foot center will be built at the southwest corner of College and Pennsylvania Avenues at the confluence of Oak Creek, South Milwaukee and Cudahy.
The building will house all mail processing and distribution operations for southeastern Wisconsin, including those currently located within the Postal Service's main facility at 345 W. St. Paul Ave. in downtown Milwaukee.
The facility will bring 2,200 jobs to Oak Creek and will be one of the largest light industrial buildings developed in the region in recent years.
"This project will help create even more jobs in our area," said Oak Creek Mayor Richard Bolender.
The new mail processing center will serve 672 postal locations in southeastern Wisconsin, and will replace three processing facilities, including one at the downtown Milwaukee post office.
"We are extremely delighted that the Postal Service will be keeping these good paying jobs in Milwaukee County," said Milwaukee County Executive Scott Walker. "The relocation of this postal facility from downtown to Oak Creek is consistent with our long-term vision for the airport corridor."
Earlier this year, the Postal Service purchased the 64-acre parcel from Cobalt Partners.  Construction of the facility will begin in the next 12 to 24 months and will take two years to complete.

The American automotive industry needs government help now, says U.S. Rep. Dave Obey (D-Wausau). "This is the most dangerous economic time since the '30s, and we stand at risk of having the whole blasted system collapse," Obey said. Read more in BizTimes Milwaukee's daily roundup of headlines from newspapers across the state at www.biztimes.com/#news.

West Bend-based Commerce State Bank will move in January into its new, two-story 33,000-square-foot headquarters that is under construction at 1700 S. Silverbrook Drive. Read more in the new edition of the BizTimes Real Estate Weekly bulletin.

The Alliance Francaise recently held its annual fundraiser, Féte du Beaujolais Nouveau, at the Eisner Museum of Advertising and Design in Milwaukee. The Beaujolais Nouveau wine was brought directly from France to Milwaukee. To view a photographic slideshow of the event, visit the latest edition of BizTimes Around Town.

Dennis Ellmaurer adds to the chorus of calls to protest the Milwaukee sick leave mandate in today's Milwaukee Biz Blog.