Mortgage applications drop 4.3%
Mortgage applications fell 4.3% in the most recent week even as mortgage rates retained their lowest levels since the 1940s. The Mortgage Bankers Association noted the market composite index – a measure of mortgage loan application volume – declined 4.3% as interest rates continued to fall on the fact the Federal Reserve is investing in longer-term Treasury and mortgage securities. The refinance index fell 5.2% from the previous week, while the index of loan purchases fell a slight 0.8%. Meanwhile, the unadjusted purchase index fell 1.7% compared with the previous week and was 12.1% lower than the same week last year. "Interest rates continued to fall last week, driven by the latest Federal Reserve actions to invest in longer-term Treasury and mortgage securities, but potential borrowers largely remained on the sidelines, seemingly unimpressed by the lowest (by any measure) mortgage rates since the 1940s," said Mike Fratantoni, MBA's vice president of research and economics. Refinance activity declined to 79.1% of total application activity, down from 79.7%. Looking at contract interest rates, the average 30-year, fixed-rate mortgage with a conforming loan balance of $417,500 or less fell to 4.18% from 4.24%, while the average 30-year, FRM for a jumbo loan fell to 4.49% from 4.53%. In addition, the average 30-year, FRM backed by the FHA fell to 4.05% from 4.06%. At the same time, the 15-year, FRM grew to 3.49% from 3.46%, and the average contract interest rate for 5/1 ARMs grew to 3.02% from 2.95%. Write to Kerri Panchuk.