Home Loan Applications Drop Again; Hit New Five-Month Low

The volume of U.S. mortgage applications slid last week to its weakest levels in more than five months, the Mortgage Bankers Association said Wednesday.

Demand for home loans to purchase real estate continued to erode amid escalating credit concerns and tighter underwriting standards.

The group said that its seasonally adjusted index of mortgage loan applications dipped 0.3 percent in the week ending July 27 to 607.1.

That level if mortgage activity is just above the levels registered in the February 16 week.

The home purchase loan index fell by 1.8 percent to a seasonally adjusted 416.6 last week. The last time this gauge of home loan activity was lower was in the week ending April 20, when it dropped to 411.0.

Average 30-year mortgage rates fell 0.09 percent in the past week to 6.50 percent, helping drive up loan requests for mortgage refinancing.

The group’s mortgage refinance index rose 1.8 percent to a seasonally adjusted 1,724.1, according to the weekly survey.

Long-term (30-year) fixed-rate borrowing costs have strayed little during the summer after mortgage rates rose from the 6-6.25 percent range seen during the first four months of the year to around 6.75 for a time.

SOURCE: Reuters