Mortgage Applications Rise (WFC, HCBK)

The Mortgage Banker's Association on Wednesday said mortgage applications rose last week, aided by lower rates.

Applications to buy or refinance homes rose 14.6 percent in the week ended February 26. Purchasing applications rose 9 percent while refinancing applications rose 17.2 percent.

U.S. mortgage rates fell below the psychological 5 percent level last week, which led to a rush in homeowners looking to refinance. Refinancing loans represented 69 percent of all applications last week. Refinancing has been a boon for banks such as Wells Fargo & Company (NYSE: WFC) and Hudson City Bancorp (NASDAQ: HCBK).

Housing faces a fragile recovery as roughly one-quarter of U.S. homeowners have negative equity in their homes. Negative equity occurs when homeowners owe more on their mortgage than their mortgage is worth.

Persistent levels of high unemployment remain the biggest threat to housing's recovery.