U.S. mortgage applications dropped more than 5% last week, hitting their lowest level this year, even as interest rates fell, an industry trade group said Wednesday.
AP
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The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended Feb.16, fell 5.2% to 606.6.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.19%, down 0.05% from the previous week. Interest rates were slightly below year-ago levels of 6.22%.The MBA's seasonally adjusted purchase index fell 4.8% to 381.4, its lowest since the week ended Oct. 27, 2006, when it stood at 375.6. The index was also below its year-ago level of 408.7.
The purchase index is considered a timely gauge of U.S.home sales
Refinancing Skids
The group's seasonally adjusted index of refinancing applications slid 5.4% to 1,921.1. A year earlier the Index stood at 1,571.4.The refinance share of applications decreased to 44.9% from 46.1% the previous week.Fixed 15-year mortgage rates averaged 5.88%, down from 5.94%. Rates on one-year adjustable-rate mortgages, or ARMs, increased to 5.81% from 5.80%. The ARM share of activity was unchanged at 21.2%.
The MBA's survey covers about 50% of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.