Mortgage Applications Back Down Again

By:: Kara Johnson | June 23, 2010

Mortgage applications fell last week after a brief surge, despite a slight relaxation in interest rates, according to figures released this morning by the Mortgage Bankers Association.

Applications were down a seasonally adjusted 5.9 percent, after a brief jump of 17.7 percent the week before. Most of the decline was in applications for refinancing, which fell 7.3 percent after hitting a 13-month high last week.

Purchase applications fell 1.2 percent last week, following a 7.1 percent gain the week before. That increase had reversed six straight weeks of declining purchase applications since the April 30 deadline for sales contracts to qualify for the homebuyer tax credits.

On a four-week moving average, overall applications are down 0.5 percent, with a 1.1 percent decline in purchase applications and a 0.4 percent decline in refinance applications, all seasonally adjusted.

Average interest rates reported for the week were down slightly; the average rate on 30-year fixed-rate loans declined to 4.75 percent from 4.82 percent the week before, reaching its lowest point since May 2009. Average points paid (including origination fees) increased to 1.07 from 0.89, with an overall decline in the effective rate.

Average rates on 15-year fixed-rate loans dropped to 4.19 percent from 4.23 percent, but an increase in points to 1.00 from 0.83 mean the effective rate was unchanged. All rates are based on loans with an 80-percent loan-to-value ratio.

The survey is for the week ending Friday, June 18 and covers 50 percent of all U.S. residential mortgage applications, including those submitted to by mortgage bankers, commercial banks and thrifts.

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