Mortgage Loan Applications Fall

Mortgage lenders received fewer loan applications than they have in about seven months as a jump in interest rates discouraged consumers from applying, U.S. mortgage bankers reported Thursday.

The Mortgage Bankers Assn. of America’s index of market mortgage applications fell 10.6% to 208.6 in the week ended March 22 from 233.4 in the previous week. The index is at its lowest point since the week ended Aug. 25.

The index, a yardstick of how many mortgage applications U.S. mortgage bankers are receiving in a week, is adjusted to account for seasonal changes, such as holidays.

This week’s report shows that lenders are logging far fewer applications both for home purchases and for refinancings.

The group’s refinancing applications index dropped 18% to 462.9 last week, the lowest point since the start of October, from 564.7 the previous week. The index for applications to purchase homes declined almost 7% to 164.9 from 176.4 last week.

Mortgage rates fell this week. The average effective rate on 30-year, fixed-rate mortgages, which includes 1.2 points, eased to 8.1% from 8.18%. Points are fees lenders charge to cover the cost of processing loans.

The rate on one-year, adjustable-rate mortgages pegged to the one-year Constant Maturity Treasury index inched up to 6.26%, up from 6.23%. This week’s rate includes 1.41 points.

The mortgage bankers group has surveyed mortgage lenders about applications for the past five years. The base period, when the indexes were set to 100, is still the week ended March 16, 1990. The survey now covers about 40% of the U.S. residential mortgage market.

Not adjusted for seasonal effects, the MBA’s market index fell 10.8% to 228.2 from 255.9. The refinancing index dropped 18% to 462.9 from 564.7.