Consumer demand for home mortgages declined last week, according to data released Wednesday. It marks the second consecutive week that the number of home loan applications has dropped, as long-term mortgage rates came in above the 5 percent threshold yet again.
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The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) said its measurement of total mortgage application volume slipped 9.5 percent for the week ending February 11, 2011. _Bloomberg News_ reports that the trade group's gauge has hit its lowest point in more than two years.
MBA's index of applications for home purchases decreased 5.9 percent, while the refinance index plunged 11.4 percent.
[COLUMN_BREAK]According to MBA, the refinance reading is its lowest since the week of July 3, 2009. The refinance share of mortgage activity decreased to 64 percent of total applications, down from 66.6 percent the previous week. This is the fourth straight week the share has declined.
Based on MBA's survey, the average contract interest rate for 30-year fixed-rate mortgages actually decreased slightly last week, falling from 5.13 percent to 5.12 percent.
The average contract interest rate for 15-year fixed-rate mortgages increased to 4.34 percent, up from 4.29 percent the week before. This is the highest contract 15-year rate observed in the survey since April 2010.
Commenting on the latest survey results, Michael Fratantoni, MBA's VP of research and economics, said, ""Mortgage rates remained above 5 percent last week, up almost a full percentage point from their October lows, and refinance volume continued to drop.""
Fratantoni added, ""Applications for home purchases also declined on a seasonally adjusted basis. Buyers have not returned to the market as rising rates have reduced affordability, to some extent.""