Weekly gauge shows fewer borrowers applied for home loans
Home-loan application volumes continue to fall, a trade group says, in another indication that the battered housing market may continue to limp along this spring.
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 of rising interest rates, as well as the fact that so many homeowners already have locked in 30-year rates that start with a "4."
The average for a 30-year fixed-rate loan has risen from the 4.3% range last fall to about 4.9%, and the Mortgage Bankers Assn. is predicting that last year's $1.1 trillion in refinance lending will plunge 61% to $425 billion this year.
Since the rates are still remarkably low by historic standards and the economy is slowly improving, the mortgage trade group has forecast that loans to buy homes should rise 28% in 2011 to $607 billion, up from $473 billion last year.
The group's report on applications tends to fluctuate greatly on a week-to-week basis so the latest numbers may be overstating the decline. The report said a four-week moving average for all mortgage applications was down by 3.3% but up 0.7% for purchase loans.
-- E. Scott Reckard
Photo: Distress was apparent in Hemet last year. Credit: Gina Ferazzi / Los Angeles Times