Home Mortgage Applications Drop to Lowest Since Mid-March

U.S. home loan applications fell last week to the lowest level since mid-March, driven by a big drop in refinancing demand even as mortgage rates clung to record lows, according to the Mortgage Bankers Association on Wednesday. Refinance applications fell 21.9 percent in the week ended April 24, overwhelming the 0.6 percent dip in home purchase loan requests to drag the trade group's total loan index down 18.1 percent.The drop in total mortgage applications brought that index to 960.6, its lowest since 876.9 in the March 13 week.

The rate nearly matched the all-time low of 4.61 percent set in the week ended March 27 and was well below 6.01 percent a year ago.

Still, it remained well above 2,722.7 in early February, when the average 30-year mortgage rate was more than 1/2 percentage point higher. Refinancings represented about 75 percent of all mortgage applications last week, down from a nearly 80 percent share the prior week.

"A combination of the lowest rates in generations and a pretty healthy decline in property values in most parts of the country strikes me as something that certainly is positive for the housing market, although it's hard to predict certainly where the bottom in pricing will be," said Scott Happ, chief executive at Mortgagebot, a mortgage origination software company in Mequon, Wisconsin.

Sources:

Reuters