Mortgage Applications Decline for Third Consecutive Week

As a result of blizzard conditions and increasing interest rates, mortgage loan application volume fell 8.5 percent on a seasonally adjusted basis for the week ending February 19, 2010, according to data released Wednesday by the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA).

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""As many East Coast markets were digging out from the blizzard last week, purchase applications fell, another indication that housing demand remains relatively weak,"" said Michael Fratantoni, MBA's VP of research and

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economics. ""With home prices continuing to drift amid an abundant inventory of homes on the market, potential homebuyers do not see any urgency to lock in purchases.""

According to MBA's weekly survey, the Refinance Index decreased 8.9 percent on a week-to-week basis, as the refinance share of mortgage activity decreased to 68.1 percent of total applications, down from 69.3 percent the previous week. During the same period, the seasonally adjusted Purchase Index dropped 7.3 percent, putting the index at its lowest level since May 1997.

The four week moving average for the seasonally adjusted Market Index rose 1.6 percent, and the Refinance Index average was up 3.2 percent. However, the four week average for the seasonally adjusted Purchase Index was down 2.1 percent.

The slump in mortgage application volume was accompanied by a week-to-week jump in mortgage interest rates. The average contract interest rate for 30-year fixed-rate mortgages inched up to 5.03 percent from 4.94 percent, and the average rate for 15-year fixed-rate mortgages increased to 4.35 percent from 4.33 percent.