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U.S. Mortgage Applications Slip As Borrowing Costs Rise - MBA

Reuters
Friday, 13 Apr 2007 | 5:23 PM ET

U.S. mortgage applications declined last week, as falling demand to refinance home loans outweighed a rise in applications to buy homes, an industry group said Wednesday.

Borrowing costs increased for all loan types, with the average rate on 30-year fixed-rate loans climbing to a six-week peak.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications dipped 0.4% to 646.6 in the week ended Friday, April 6.

Thirty-year fixed home loan rates last week rose 0.03% to 6.16%, excluding fees, matching the rate of the Feb. 23 week, according to the Mortgage Bankers Association.

The MBA's seasonally adjusted purchase index rose 2.7% to 413.8 last week.

But the refinancing applications index dropped 4.0% to 2,015.0, its lowest level since mortgage rates reached their recent peak in late February.

On a four-week moving average, which smooths out volatility, the MBA said its market and refinancing measures declined and the purchase index was little changed.

On that basis, the seasonally adjusted market index was 1.6% lower at 659.8, the purchase index stood at 409.6 compared with 409.7, and the refinancing gauge was down 3.4% at 2,129.9.

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