Mortgage applications decline from previous week
Home-loan application volumes slumped last week, adding to indications that the battered housing market might keep limping along this spring.
The Mortgage Bankers Assn. said the seasonally adjusted volume of applications for mortgages fell 6.7% last week from the week before.
Home-purchase applications declined 4.7%, and refinance activity was down 7.7% to its lowest level since Feb. 11, according to Wednesday’s report.
Refinance loans, currently about 60% of the market, have fallen in number because interest rates have jumped after many homeowners took advantage of 30-year rates averaging well below 5%.
The average for a 30-year fixed-rate loan has risen from about 4.3% last fall to about 4.9%, and the mortgage trade group is predicting that last year’s $1.1 trillion in refinance lending will plunge 61% to $425 billion this year.
Because rates are still low by historical standards and the economy is slowly improving, the association has forecast that loans to buy homes will rise 28% in 2011 to $607 billion, up from $473 billion last year.
Loan applications tend to fluctuate greatly on a week-to-week basis. A four-week moving average for all mortgage applications was down by 3.3%, but the four-week average for purchase loans was up 0.7%.
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