Mortgage Applications Continue Downward Trend

Washington, DC, January 3, 2008--Mortgage applications fell 11.6 percent last week to the lowest level since July 2006, according to the Mortgage Bankers Association. It was the third consecutive decline.

Applications for loans to purchase homes dropped to the lowest number in more than four years, and demand for refinancing loans dropped to the lowest since December 2006, the association said.

The association's purchase index dropped 8.5 percent to its slowest demand since October 2003. The refinancing index slid 15.4 percent.

Doug Duncan, chief economist at the MBA, said the data reflect continued weakness in the real estate market and the MBA's forecast for housing to bottom in third quarter of 2008.

Adjustable-rate mortgages continued to fall as a share of total applications. ARMs represented less than 10 percent of all loans.

One-year adjustable mortgages fell to 6.00 percent, the lowest since mid-November.