Drop in Rates Fails to Boost Mortgage Applications

Mortgage applications
John Raoux/AP

By Caroline Valetkevitch

NEW YORK -- Applications for U.S. home mortgages declined last week as both refinancing and purchase applications decreased, 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 3.1 percent in the week ended May 30.

The MBA's seasonally adjusted index of refinancing applications fell 2.9 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, dropped 3.6 percent.

Fixed 30-year mortgage rates averaged 4.26 percent in the week, down 5 basis points from 4.31 percent the week before.

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

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