US Mortgage Applications Post Big Drop

US Mortgage Applications Drop in Latest Week
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Applications for U.S. home mortgages fell to their lowest level since early November last week and the purchase index fell after a five-week climb, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 12.3 percent in the week ended Dec. 14.

The MBA's seasonally adjusted index of refinancing applications fell 13.8 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 4.8 percent, dropping from its high point on the year.

The refinance share of total mortgage activity fell to 83 percent of applications from 84 percent the week before.

Fixed 30-year mortgage rates averaged 3.50 percent in the week, up three basis points from 3.47 the week before, which was the lowest in the history of the survey.

The rise in rates came even with the Federal Reserve's announcement last week that it would purchase more Treasury securities each month.

"Rates increased in the second half of the week," said Mike Fratantoni, MBA's Vice President of Research and Economics.

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