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Mortgage applications fall as refinancings decline

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Mortgage applications fell 2% this past week as refinancing activity continued to decline, the Mortgage Bankers Association said Wednesday. Overall, the market composite index — a measure of loan volume — declined 2%. That drop followed on the heels of a 7.5% decline in loan volume a week earlier. On an unadjusted basis, the index fell 1.5% when compared to the previous week. The four-week moving average for the seasonally adjusted market index also dropped 1.9% after growing 2% last week. The refinance index during the period fell 6.2%, while the seasonally adjusted purchase index grew 6.7%, its highest level in the past 12 months. Activity within the government purchase index also grew 10.3% on a seasonally adjusted basis. "Purchase application volume increased last week reaching the highest level of the year, but remains relatively low by historical standards, at levels last seen in 1997," said Michael Fratantoni, MBA's vice president of research and economics. "The increase last week was due to a sharp increase in applications for government loans. Borrowers were likely motivated to apply before a scheduled increase in FHA insurance premiums." Refinancing activity during the period decreased to 61.2% of total applications, down from 64.3%. Meanwhile, the average interest rate for a 30-year, fixed mortgage increased to 4.93% from 4.92% a week ago. In addition, the average rate for a 15-year, fixed-rate mortgage decreased to 4.14% from 4.16%. Write to Kerri Panchuk.

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