New mortgage applications at a trickle

The number of applications for loans to finance housing purchases remained unusually low last week despite record-low interest rates, suggesting no imminent recovery in home sales, a mortgage banking group said Wednesday.

But an index of applications for loans to refinance mortgages jumped to a 16-month high, the Mortgage Bankers Assn. said

The trade group reported that purchase-loan applications fell 0.4% last week from the week before, but were up 1.8% after the numbers were adjusted for seasonal factors. Applications from home buyers were down 37% from a year earlier.

“The continued low level of purchase applications indicates we are unlikely to see an increase in new-home sales reported for August or existing-home sales reported for September,” said Michael Fratantoni, the association’s vice president of research and economics, who said the housing market remained “exceptionally weak.”

The average interest rate obtained on 30-year fixed-rate mortgages with down payments of at least 20% fell to 4.43% last week from 4.55% the week before.

Many borrowers may have opted to pay more upfront to “buy down” their interest rates. Initial payments to lenders, including origination fees, averaged 1.34% of the loan amount last week, up from 0.89% the week before.

Low rates have set off a refinancing boom. The bankers group said its index of refinancing applications rose 2.8% from the previous week, reaching its highest level since May 1, 2009.

scott.reckard@latimes.com