Real estate purchases drop

Overall mortgage applications declined 5.8 percent last week on a seasonally adjusted basis from the week before, with refinancings taking the biggest hit, the Mortgage Bankers Association reported today.

The seasonally adjusted purchase index decreased by 3.9 percent to 416.5 from 433.3 the previous week whereas the refinance index decreased by 8.8 percent to 1,427.4 from 1,565.6 one week earlier.

The refinance share of mortgage activity decreased to 33.8 percent of total applications from 35.2 percent the previous week, which is the lowest share since June 25, 2004. The adjustable-rate-mortgage share of activity increased to 28.5 percent of total applications from 28.3 percent the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 6.61 percent from 6.57 percent, with points including the origination fee decreasing to 1.14 from 1.18 for 80 percent loan-to-value ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 6.2 percent from 6.19 percent. Points including the origination fee increased to 1.23 from 1.18 for 80 percent loan-to-value ratio loans.

The average contract interest rate for one-year adjustable-rate mortgages decreased to 6.04 percent from 6.08 percent, with points including the origination fee increasing to 0.86 from 0.85 for 80 percent loan-to-value ratio loans.

Washington, D.C.-based Mortgage Bankers Association is a national association representing the real estate finance industry. The survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

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