Loan demand remains weak

Demand for purchase mortgages rose last week by a seasonally adjusted 2.4 percent from the week before, but was off 32.4 percent from a year ago, the Mortgage Bankers Association said in releasing the results of its latest Weekly Mortgage Applications Survey.

For the week ending Sept. 24, demand for refinancings was down 1.6 percent from the week before, although requests for refinancings still accounted for 80.7 percent of all mortgage applications.

Rates on 30-year and 15-year fixed-rate mortgages both hit new lows for the MBA survey, which began in 1990.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.38 percent from 4.44 percent, with points increasing to 1.01 from 0.81 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. Despite the increase in points, the effective rate also decreased.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.77 percent from 3.88 percent, with points increasing to 1.13 from 0.86 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.

The average contract interest rate for one-year adjustable-rate mortgage (ARM) loans increased to 7.04 percent from 6.96 percent, with points increasing to 0.22 from 0.21 (including the origination fee) for 80 percent LTV loans.

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