After three weeks of solid increases, the industry's volume of new mortgage applications took a sharp dive last week, as refinancing plunged to its slowest pace in a year and home purchases declined to their lowest level in nearly four months.
The ""Mortgage Bankers Association (MBA) said"":http://www.mortgagebankers.org/NewsandMedia/PressCenter/75464.htm Wednesday that its measurement of total mortgage loan application[IMAGE] [COLUMN_BREAK]
volume decreased 12.9 percent for the week ending January 21, 2011 when compared to one week earlier. The results do not include an adjustment for the Martin Luther King holiday.
_Bloomberg_ reports that overall mortgage application volume has fallen to its lowest reading since November 2008. Steep drop-offs in both the number of homeowners looking to refinance and the number of homebuyers applying for a purchase loan contributed to the decline.
MBA's refinance index decreased 15.3 percent from the previous week and reached its lowest level since January 2010. Refinances made up 70 percent of total applications. The trade group's purchase index dropped 8.7 percent to its lowest level since October 2010.
MBA also reported average contract interest rates for the week ending January 21. Rates for 30-year fixed mortgages increased from 4.77 percent to 4.80 percent. The average rate for a 15-year fixed mortgage decreased from 4.16 percent to 4.12 percent.