Mortgage Applications Down This Week

Mortgage applications fell in the last week for the first time in a month, reflecting a drop in demand for home mortgage refinancing even as interest rates hovered near recent, historic lows.

The Mortgage Bankers Association said its seasonally adjusted index of home mortgage application activity for the week ended March 16, which includes both refinancing and home purchase loan activity, fell 2.7 percent.

The four-week moving average of mortgage applications, which smooths the volatile weekly figures somewhat, was up 2.5 percent.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.06 percent, up 0.03 percent from the previous week, when the average reached its lowest since early December.

U.S. mortgage rates were also significantly below year-ago levels of 6.31 percent.

Rapidly rising defaults in the bad credit mortgage market, which caters to risky borrowers, and collapsing lenders may be taking a toll on home sales.

The MBA’s seasonally adjusted purchase index, considered a timely gauge of U.S. home sales, fell 0.9 percent in the latest week, to 410.6. The index, however, was above its year-ago level of 393.6.

The group’s seasonally adjusted index of mortgage refinance applications slipped 4.5 percent to 2,208.6. A year earlier the index stood at 1,574.5.

The refinance share of applications fell to 45.3 percent from 46.2 percent the previous week.

Fixed 15-year mortgage rates averaged 5.79 percent, slightly up from 5.78 percent. Rates on one-year ARMs increased to an average 5.88 percent from 5.86.

The ARM share of mortgage activity slipped to 20.9 percent from 21.9 percent the previous week.

U.S. housing market indexes, in general, tend to be volatile and have recently painted a mixed picture, with some pointing to weakening and others to stabilization in the hard-hit sector.

SOURCE: USA Today