WASHINGTON – Fewer mortgage applications were filed nationwide last week than the week before, the Mortgage Bankers Association said in its weekly report.
For the week ended June 20, the group’s seasonally adjusted Market Composite Index – a measure of the mortgage loan application volume – fell to 461.3 points. That represented a 9.3-percent decline from the previous week’s 508.4 points and a 25.3-percent decrease from the same week a year ago. The new level was the lowest since February 2003, according to Bloomberg News.
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The MBA’s seasonally adjusted Purchase Index also decreased last week, dropping 7.4 percent to 333.4 points after dropping 7.2 percent the week before. Meanwhile, the seasonally adjusted Refinance Index plunged 12.1 percent to 1,212.2 points – the lowest in nearly seven years – from its 1,378.6-point score in the week ended June 13.
Refinancing attempts accounted for 36.3 percent of total applications last week, down from 37.4 percent the week before and 39.8 percent in the week ended June 6. Adjustable-rate mortgages (ARMs) accounted for only 8.5 percent of applications, down from 9.7 percent in the week ended June 13 and 10.3 percent in the week ended June 6.
The average contract interest rate for a 30-year fixed-rate mortgage fell to 6.39 percent last week from 6.57 percent the week before, but remained above the 6.24-percent average of the week ended June 6. The average rate for a 15-year fixed-rate mortgage also dropped, to 5.95 percent last week from the preceding week’s 6.14 percent. And the average contract interest rate for a one-year ARM fell to 7.09 percent from 7.22 percent the week before, but remained above the 6.87 percent of the week ended June 6.
“Until housing deflation ebbs, the risk of more foreclosures and renewed financial instability will remain high,” Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, told Bloomberg News. “Falling prices are sinking household confidence.”
The MBA survey, compiled each week since 1990, covers about half of all retail residential mortgage originations nationwide.
The Mortgage Bankers Association is a trade group representing the real estate finance industry. Its 3,000 member companies include mortgage firms, commercial banks, thrifts and life insurance companies. Additional information, including the MBA’s Weekly Application Survey, is available at www.mortgagebankers.org.
