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Mortgage applications drop as rates hover above 5%

The volume of mortgage applications filed in the past week continued to fall as rates hovered above 5% and mortgage refinancings declined, the Mortgage Bankers Association said in its Weekly Mortgage Applications Survey Wednesday morning. The survey of mortgage loan volumes for the week ending Feb. 11 shows the market composite index — a measure of loan volume — dropping 9.5% on a seasonally adjusted basis when compared to a week earlier. On an unadjusted basis, the index fell 7.9% The refinance index, which measures the number of homeowners filing to refinance mortgages, also declined 11.4%, deeper than the 7.7%-drop recorded last week, while the purchase index  fell 5.9% on a seasonally adjusted basis. "Mortgage rates remained above 5 percent last week, up almost a full percentage point from their October lows, and refinance volume continued to drop," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Applications for home purchases also declined on a seasonally adjusted basis.  Buyers have not returned to the market as rising rates have reduced affordability, to some extent." The four-week moving average for the seasonally adjusted market index is down 4.5%, while the four-week moving averages for the purchase index and the refinance index are down 1.9% and 6.2%, respectively. Refinancing activity decreased to 64% of total applications last week, compared to 66.6% a week earlier. The average interest rate for a 30-year, fixed-rate mortgage hovered at 5.12%, compared to 5.13% a week earlier. In addition, the average rate for a 15-year, fixed-rate mortgage increased to 4.34%, up from 4.29%. Write to Kerri Panchuk.

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