Demand for Home Loans Decline
According to the Mortgage Bankers Association, U.S. mortgage applications declined last week, reflecting lower demand for home loan refinancing as interest rates increased to their highest since October.
The agency said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended March 7 fell 1.9 percent to 671.7.
The U.S. housing market is suffering one of the worst downturns in history. Last week's drop in demand may indicate what is in store for the hard-hit sector this spring, which is the peak home-buying season.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.37 percent, up 0.39 percentage point from the previous week, the highest since the week ended October 12, 2007 when it hit 6.40 percent.
Fixed 15-year mortgage rates averaged 5.72 percent, up from 5.26 percent the previous week. Rates on one-year adjustable-rate mortgages (ARMs) increased to 6.72 percent from 5.83 percent.
Overall mortgage applications last week were 2.7 percent below their year-ago level. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 12.1 percent to 711.1.
Published on March 12, 2008
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