The volume of mortgage loan applications last week declined 0.8 percent, the ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) reported Wednesday.
The drop was manufactured by a falloff in consumer demand for mortgage refinancing, despite the fact that interest rates again declined to new record-lows.
[IMAGE] [COLUMN_BREAK]For the ""week ending September 24"":http://www.mortgagebankers.org/NewsandMedia/PressCenter/74058.htm, MBA's refinance index decreased 1.6 percent compared to the previous week. It's the fourth straight week that refinance activity has declined. The refinance share of mortgage applications was cut to 80.7 percent of total applications.
The trade group's purchase index, which has been in an up-and-down flux for some time now, increased 2.4 percent from one week earlier. MBA says the gain was driven by a 4.5 percent jump in applications to government agencies, while conventional purchase applications increased 0.8 percent.
According to MBA's market data, the average contract interest rate for 30-year fixed-rate mortgages decreased to 4.38 percent, down from 4.44 percent the week prior. Last week's 30-year rate is a new low for the organization's survey. The previous low was 4.43 percent for the week ending August 27, 2010.
The average contract interest rate for 15-year fixed-rate mortgages also dropped, down to 3.77 percent from 3.88 percent. It too is the lowest 15-year contract rate recorded by MBA. The previous low was observed last week.