Mortgage Applications Slip Even as Rates Fall

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Patrick Fallon/Bloomberg via Getty Images

By Luciana Lopez

NEW YORK -- Applications for U.S. home loans fell slightly in the latest week, as a drop in demand for purchase loans outweighed an increase in refinancing demand, data from an industry group showed Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 0.4 percent in the week ended Sept. 27.

That follows a gain of 5.5 percent in the week ended Sept. 20.

%VIRTUAL-article-sponsoredlinks%The figures come in the first full week of data after the Federal Reserve decided not to slow its bond-buying program. The Fed's decision to keep buying $85 billion a month in Treasuries and mortgage-backed securities helped take yields on Treasuries, which are used as a benchmark in the mortgage market, to multi-month lows.

MBA data showed 30-year mortgage rates dropped 13 basis points to 4.49 percent, after earlier in September matching the 4.8 percent high for 2013. The figure for the latest week was the lowest since June.

The refinancing index gained 3.1 percent after recently hitting the lowest level since June 2009.

The mortgage survey covers more than 75 percent of U.S. retail residential mortgage applications, according to MBA.