Mortgage Application Volumes Drop

The volume of mortgage applications filed in the week ending March 28 tumbled 28.7 percent, according to a survey revealed by the Mortgage Bankers Association's weekly survey.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50 percent of all residential retail mortgage originations each week.

The U.S. housing market is currently suffering one of the worst downturns in its history. Last week's drop in demand may indicate what is in store for the hard hit sector this spring, which is peak time for the home-buying season.

Refinancing applications also took a 38.1% dive on a week-to-week basis, according to another survey from the MBA. In the week ended March 21, applications rose in response to lower interest rates.

The housing downturn, now in its third year, is filtering through other parts of the economy and weakening growth. Owners may be waiting for better deals before refinancing as rates on fixed mortgages have started to come down after as the Federal Reserve pumped money into financial markets.

FHA applications - which have surged in recent weeks as well, thanks to efforts to revitalize the program - also posted their first weekly decline in over one month, falling 15.1 percent.

The average interest rate for one-year adjustable-rate mortgages fell to 7 percent from 7.02 percent.