Mortgage applications drop despite rates

Mortgage applications decreased last week despite record-low loan rates but the purchase index was up 6.3 percent, the highest level in three months. 

The seasonally adjusted index of mortgage applications, which
includes both purchase and refinance loans, dropped 1.5 percent for the
week that ended Sept. 3, while refinancings also fell by 3.1 percent
from the previous week, the first drop in six weeks, the Mortgage
Bankers Association said Wednesday.

{mosads}”Purchase applications
increased last week, reaching the highest level since the end of May,”
Michael Fratantoni, MBA’s vice president of research and economics, said
in a statement. 

“However, purchase activity remains well below
levels seen prior to the expiration of the homebuyer tax credit, and is
almost 40 percent below the level recorded one year ago.”

The four-week moving average for applications, which smoothes the volatile weekly figures, was up 4.4 percent.

Although refinancing applications were down slightly, the level is still hovering close to recent highs, Fratantoni said.  

The market share of refinancings dropped to 81.9 percent this week, from 82.9 percent. 

Meanwhile, mortgage rates increased slightly over the past week, with 30-year fixed mortgages rising to an average of 4.50 percent, up from 4.43 percent last week. Interest rates were well below their year-ago level of 5.24 percent.

Rates for 15-year fixed mortgages were up to 4.0 percent from 3.88 last week.