Key measure of mortgage applications declines again

February 15, 2004|By BLOOMBERG NEWS

An index of U.S. mortgage applications declined for a third week, reflecting fewer home purchases and less refinancing, an industry group report showed.

The Mortgage Bankers Association's index dropped 6.8 percent to 797.8 last week. The home purchase applications measure fell 9.4 percent to 402.2.

The MBA's index measuring applications to refinance homes fell 4.7 percent to 3099.1. Refinancing helps boost consumer spending, which accounts for 70 percent of the economy, by putting more cash in the pockets of homeowners. The index has dropped since reaching a record of 9977.8 May 30.

Benchmark 30-year mortgage interest rates hit a four decade low in June, reaching 5.21 percent. The rates have bounced up and down ever since though they largely have remained below 6 percent.

The rates averaged 5.66 percent last week.

The U.S. homeownership rate rose to a record 68.6 percent in the fourth quarter of last year, according to figures from the Commerce Department. The rental vacancy rate rose to 10.2 percent, from 9.9 percent the prior three months.

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