Mortgage Applications Continue to Drop

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House for Sale

The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a decrease of 7.1% in the group's seasonally adjusted composite index. That followed a drop of 4.7% for the previous week.

The seasonally adjusted purchase index fell by 4% from the previous report. On an unadjusted basis, the composite index slid by 7% week-over-week. The unadjusted purchase index fell 3% for the week and is up 6% year-over-year.

The share of refinancings dropped last week to 75%, the 10th straight week of declines and the lowest level since last May.

The average contract interest rate for a conforming 30-year fixed-rate mortgage fell from 3.81% to 3.82%. The rate for a jumbo 30-year fixed-rate mortgage decreased, from 3.90% to 3.95%. The average interest rate for a 15-year fixed-rate mortgage rose from 3.01% to 3.02%.

The contract interest rate for a 5/1 adjustable rate mortgage remained fell from 2.62% to 2.59%.

Mortgage rates rose again last week, discouraging homeowners looking to refinance. The refinance rate continues to slip and home buyers have not yet turned up in large numbers, likely due to the lack of inventory. Earlier this week the National Association of Home Builders (NAHB) reported a decline in builder confidence, and yesterday's report on new housing starts indicated that building was slower than expected, although the number of new permits was growing.

Filed under: 24/7 Wall St. Wire, Housing, Research