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.
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
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.