Mortgage Applications Dive on Higher Rates, Low Inventory

By Caroline Valetkevitch

NEW YORK -- Applications for U.S. home mortgages fell last week to their lowest level since December 2000 as both refinancing and purchase applications declined, an industry group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 5.9 percent to 333.2 in the week ended April 25. That was the lowest level since December 2000, the group said.

%VIRTUAL-article-sponsoredlinks%"Purchase application volume remains weak despite other data which indicated the overall pace of economic growth is picking up. The combination of higher rates, new regulation and tight inventory are all leading to a weaker spring market than we have seen in years," said Mike Fratantoni, MBA's chief economist.

The MBA's seasonally adjusted index of refinancing applications declined 6.9 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 4.4 percent.

Fixed 30-year mortgage rates averaged 4.49 percent in the week, unchanged from the week before.

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