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Demand for home loans declines, Mortgage Bankers Assn. says

March 2, 2011 |  7:45 am

Price reduced In another sign of sluggishness in the mortgage markets, home-loan applications fell by 6.5% last week after adjusting for seasonal factors, the Mortgage Bankers Assn. says in its latest report.

The decline occurred despite lower interest rates, according to the trade group, which reported Wednesday that the average contract rate for 30-year fixed-rate mortgages decreased to 4.84% from an even 5%. It was the third straight week that the rate went down, the MBA says.

The weekly report tends to jump around, but the overall trend is down: A four-week moving average of mortgage applications is down by 2.5%.

With distress sales dominating the housing market, vulture investors are using cash to buy many homes, so it may be no surprise that applications for purchase-money home loans are falling.

But despite the sub-5% rate -- the trigger, once, for refinancings -- the refi share of mortgage activity decreased to 64.9% of total applications from 65.7% the previous week.

RELATED:

Home prices getting close to double dip

Southland housing still in a slump

--E. Scott Reckard

Photo credit: Larry Downing / Reuters

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