By Mike Colpitts
Mortgage rates kept near record all-time low levels, but couldn’t budge 
home lending much as applications for mortgages dropped for the third week in a row, according to the Mortgage Bankers Association.
The average mortgage rate on a fully executed 30-year fixed loan dropped to 4.23% from 4.32% for the week ending September 2nd. A 15-year fixed rate mortgage also saw a drop for the week to 3.41% from 3.49% the previous week.
Weak consumer confidence, volatility in financial markets, high unemployment and growing doubts about the U.S. housing market moving into a recovery phase enable consumers to remain negative about the economy. Mortgage applications decreased by 4.9% from one week earlier, while the seasonally adjusted refinance index fell by 6.3%. The four-week moving average also had a drop of 3.1%.
“Heading into the Labor Day weekend, the 30-year rate was at its second-lowest level in the history of our survey,” said bankers’ association economist Mike Fratantoni. “The low point was reached last October and the 15-year rate marked a new low in our survey.
“Despite these rates, however, refinance application volume fell for the third straight week, and is more than 35% below levels at this time last year. Purchase application volume remains relatively flat at extremely low levels, close to lows last seen in 1996.”
Refinancing home mortgages could be key to re-energizing the mortgage market since there are fewer potential buyers that would qualify to purchase a home.