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Mortgage Applications Decreased Last Week

Mortgage Applications Decreased Last Week
Wednesday April 20, 7:39 am ET

NEW YORK (Reuters) - Applications for U.S. home mortgages decreased last week, as purchasing and refinancing activity fell despite lower interest rates on loans, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity decreased 1.6 percent 672.6 in the week ended April 15, slightly offsetting an increase of 6.1 percent the previous week.

The MBA's seasonally adjusted index of refinancing applications fell 1.6 percent to 1870.0, after rising 5.6 percent the prior week.

The MBA's purchase index, a gauge of loan requests for home purchases, dropped 1.6 percent to 466.7, after it climbed 6.4 percent the week before.

The decrease in applications came despite lower mortgage rates on fixed and adjustable-rate loans.

According to the MBA, fixed 30-year mortgage rates averaged 5.83 percent last week, excluding fees, down 12 basis points from 5.95 percent the previous week.

Rates are almost exactly where they stood a year ago. The fixed 30-year mortgage rate as of April 16, 2004 was 5.84 percent, MBA data showed.

The average contract interest rate for 15-year fixed rate mortgages decreased last week to 5.40 percent from 5.51 percent a week earlier.

Rates on one-year adjustable-rate mortgages (ARMs) fell to 4.22 from 4.28 percent the prior week.

ARM applications share of activity decreased to 35.4 percent of total applications from 35.8 percent the previous week, the MBA said.

Refinancings also decreased as a percentage of all mortgage applications, falling to 38.0 percent of total applications from 38.1 percent the previous week.

The soft MBA report comes on the heels of other weak data on the U.S. housing market.

U.S. housing starts posted their steepest drop in more than 14 years, plunging 17.6 percent in March, to a 1.837 million unit rate from an upwardly revised 2.229 million unit pace in February, the Commerce Department said on Tuesday.

The MBA's survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990.

Respondents include mortgage bankers, commercial banks and thrifts.


LINK: http://biz.yahoo.com/rb/050420/economy_mortgages.html?.v=2