Industry News

Rates fall sharply, borrowers fail to take advantage

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Despite a sharp decline in interest rates, overall mortgage applications were down 4.9 percent last week on a seasonally adjusted basis from the week before, the Mortgage Bankers Association reported today. The seasonally adjusted purchase index decreased by 5.5 percent to 375.9 from 397.9 the previous week, and is now at its lowest level since November 2003. The refinance index decreased by 4.1 percent to 1,677.5 from 1,748.7 one week earlier. The refinance share of mortgage activity, however, increased to 44.3 percent of total applications from 43.7 percent the previous week. This is the highest that the refinance share has been since September 2005. The adjustable-rate mortgage (ARM) share of activity decreased to 26.4 percent of total applications from 27 percent the previous week. The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.18 percent from 6.36 percent, with points including the origination fee decreasing to 1.06 from 1.11 for 80 percent l...