Mortgage applications fall as interest rates rise

Decline follows record set the week before

refinancing slows

March 30, 2003

Applications for mortgages, which had set a record a week earlier, declined nationwide last week as rising mortgage interest rates led to a slowdown in refinancings.

The Mortgage Banker's Association of America's mortgage applications index was 9.1 percent lower than it had been a week earlier. The association began keeping data on applications in 1990.

The average rate on a 30-year fixed mortgage rose to 5.91 percent from a record low of 5.61 percent two weeks earlier, according to Freddie Mac. Mortgage rates remain low enough to spur refinancing, which frees up cash for purchases and underpins growth.

Refinancings remain strong as the economy struggles to regain momentum amid falling consumer confidence and weak business spending that results from concerns about the war with Iraq.

The National Association of Realtors reported Tuesday that existing homes sold at a seasonally adjusted annual rate of 5.84 million, a 4.3 percent decline from January's record-high sales pace.

Also last week, the Commerce Department said sales of new single-family homes fell 8.1 percent last month, to an annual pace of 854,000 units, from a revised 929,000 in January.

The declines were blamed on unfavorable weather last month.

Bloomberg News and the Associated Press contributed to this article.

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