Mortgage applications dried-up slightly even as interest rates dropped for the week, according to the Mortgage Bankers Association survey. The composite index, a measure of mortgage loan application volume fell 2.7% on a seasonally adjusted basis as applications fell for the second straight week.
Loan applications have been on an up-and-down cycle for more than three months, despite near all-time low mortgage interest rates. The average contract interest rate on a 30-year fixed rate mortgage fell to 4.46% from 4.57% for the week with points increasing to 1.19 on an 80% loan to value mortgage.
New mortgage loan applications decreased 2.7% and refinancing took a similar 2.6% drop from the previous week. However, the four week moving average on the seasonally adjusted market index is still up a slim 0.7%. Refinances remain the largest portion of the home mortgage market, making up 69.5% of total application volume, a slight rise from last week’s 69.2%.
The average contracted interest rate on a 15-year fixed rate mortgage dropped to 3.64% from 3.70% for the week, according to the survey, which accounts for about half of all home mortgages offered during any week in the U.S. It’s also the lowest the 15-year loan rate has reached since the start of November 2010.
Mortgage rates have remained near record lows for almost a year, but have not come close to reaching their 50-year low since last October. Weak consumer confidence, high unemployment and sluggish home sales trouble real estate markets. But some areas of the country, less impacted by the financial crisis in more rural states that have higher employment levels are sustaining less of an impact from the crisis.