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Mortgage Applications Drop 3.8%, Holiday Week at Fault

By Gretchen Wegrich Updated on 2/27/2013

By Gretchen Wegrich

In spite of a slight decrease in mortgage rates, mortgage applications continued their descent for the third straight week for the week ending Feb. 22. The Mortgage Bankers Association (MBA) reported that its seasonally adjusted mortgage application activity index, which includes both home purchase and refinancing demand, dropped 3.8 percent in the week ending Feb. 22.

The MBA made no adjustments to the index to compensate for the holiday-shortened week, which accounts for the changes. Mortgage applications dropped alongside home purchases and mortgage refinancing demand, the MBA report concluded.

Refinancing applications fell 3.3 percent in the MBA’s seasonally adjusted index of refinancing applications, while home loan requests for home purchases decreased 5.2 percent.

Total mortgage activity saw refinancing remain unchanged at 77 percent of all applications, maintaining its place at the lowest level since July 2012. Adjustable-rate mortgages remained fixed at 4% of all mortgage applications.  

Last week, fixed 30 year fixed rate mortgage rates averaged 3.77 percent. The average rate was 3.78 percent the week prior. The 30-year fixed rate mortgage with a jumbo loan balanced continued to decline, falling from 3.94% to 3.93%.

In addition, FHA 30 year fixed-rate mortgage rates held steady at 3.54%. The 15-year FRM was unchanged at 3.03%.

The average 5/1 ARM fell from 2.66% to 2.54%.

The MBA survey includes over three quarters of U.S. retail residential mortgage applications.

About The Author:
Gretchen Wegrich
Gretchen Wegrich is an editor at Lender411. She specializes in mortgage basics, personal finance and green living. She graduated with a bachelor's degree in writing from University of California, San Diego and previously worked at the Santa Cruz Sentinel. Contact her at gretchen@lender411com.

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