Mortgage apps defy rate dip, hit lowest in more than a month
Applications for U.S. home loans fell last week to their lowest level in more than a month despite a slight decline in interest rates, data from an industry group showed on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, slipped 4.7 percent in the week ended Aug 9. That was the largest decline since the week ending June 28.
The gauge of loan requests for home purchases, a leading indicator of home sales, fell 5.4 percent, resuming a downward trend that was interrupted with a slight rise the prior week.
A five-basis-point dip in 30-year mortgage rates to 4.56 percent was not enough to lure potential buyers into the market. While the rate was the lowest since the week ending June 21, it was still well above the year's low of 3.61 percent.
Interest rates began a sharp rise in late May after the Federal Reserve signaled it could begin scaling back its $85 billion in monthly bond purchases by the end of the year.
Those purchases have helped keep mortgage rates low. Cuts to the purchases could sap the strength of the housing recovery.
Refinancing demand also fell, with the refinance index down 4.4 percent to 2,145.3. The refinance share of total mortgage activity was unchanged at 63 percent.
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.