Mortgage application volume has fallen for the second straight week, led by a steep drop in home loan refinances even as mortgage interest rates edged downward again.
[IMAGE]The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) reported Wednesday that its measure of new mortgage applications decreased 8.9 percent for the week ending September 10, 2010. The trade group's analysis includes an adjustment to account for the Labor Day holiday, and follows a 1.5 percent drop in home loan applications the week prior.
[COLUMN_BREAK]MBA's index for refinances, which accounted for 80.5 percent of total applications last week, posted a decline of 10.8 percent. The index for new-purchase applications dropped 0.4 percent from one week earlier.
Mortgage interest rates have been lingering at their lowest levels in nearly a half-century for months. The ceded affordability has done little to boost market demand on its own now that the federal homebuyer tax credit has expired, while some existing homeowners looking to take advantage of the window of rock-bottom interest rates have been unable to secure refinancing now that the equity in their home has been depleted.
In ""MBA's last report"":http://dsnews.comarticles/home-purchase-apps-increase-refinances-slip-as-rates-edge-up-mba-2010-09-08, mortgage rates inched upward, but the trade group is reporting a return to declines for long-term rates for the week ending September 10.
MBA says the average contract interest rate for 30-year fixed-rate mortgages decreased to 4.47 percent last week, down from 4.50 percent.
Fifteen-year fixed-rate mortgages dropped to 3.96 percent from 4.00 percent.
The average contract interest rate for one-year adjustable-rate mortgages (ARMs) also decreased, to 6.89 percent.