Mortgage Applications Fall Despite Lower Rates

Washington, DC, July 1, 2009--Mortgage application volume last week dropped a seasonally adjusted 18.9% from the week before, as refinancing activity plunged, the Mortgage Bankers Association reported Wednesday.

Applications for mortgages to refinance existing home loans fell 30% for the week ended June 26 -- putting the MBA survey's refinance index at its lowest level since November.

Meanwhile, the week-to-week pace of applications filed for mortgages to purchase homes was down a seasonally adjusted 4.5%.

Compared with the same week in 2008, total applications for the latest week were down an unadjusted 7.4%. The four-week moving average for all mortgages was also down, off a seasonally adjusted 9.2%.

Application volumes fell even as the interest rates charged on mortgages dropped.

According to the MBA, 30-year fixed-rate mortgages carried an average rate of 5.34% last week, down from 5.44% the week before.

Fifteen-year fixed-rate mortgages averaged 4.81%, down from 4.93% the week before; the rate required payment of an average 1.04 point.

Refinancings made up 46.4% of all applications last week, down from 54% the week before. ARM applications accounted for 4.3%, up from 4.1%.