U.S. mortgage applications plunge in MBA survey

WASHINGTON – The number of mortgage applications filed nationwide plummeted last week to its lowest level this year, the Mortgage Bankers Association said today in its weekly report.

The trade group’s seasonally adjusted Market Composite Index – a measure of overall mortgage loan application volume – dropped to 420.8 points in the week ended July 25. That was a decrease of 14.1 percent from the previous week’s 489.6 point score and 30.3 percent below the index level in the same week a year earlier.

The MBA’s seasonally adjusted Purchase Index fell 7.8 percent to 309.5 last week from 335.6 the week ended July 18. The Refinance Index decreased 22.9 percent to 1,074.4 last week from 1,392.7 the week before.

Refinancing attempts accounted for 35.32 percent of total mortgage applications, down from 39.4 percent the week before, the MBA said. Meanwhile, applications for adjustable-rate mortgages (ARMs) fell to 7.3 percent of last week’s total from 8.5 percent in the week ended July 18.

- Advertisement -

The average contract interest rate for a 30-year fixed-rate mortgage decreased to 6.46 percent in the week ended July 25 from 6.59 percent the week before, and the average rate on a 15-year fixed mortgage fell to 5.98 percent from the preceding week’s 6.10 percent. The rate on a one-year ARM rose to 7.25 percent, however, from 7.16 percent in the week ended July 18.

Going forward, Patrick Newport, an economist with Global Insight Inc. in Lexington, Mass., predicted that U.S. home prices will continue to fall. “House prices will continue to drop, because inventories of unsold homes remain high,” he told Bloomberg News. “Recent progress on reducing [housing] inventories has been modest.”

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, life insurance companies and others. Additional information, including the MBA’s Weekly Application Survey, is available at www.mortgagebankers.org.

No posts to display