Mortgage applications fall

Rising borrowing costs discourage refinancing

April 18, 2004|By BLOOMBERG NEWS

The number of Americans applying for mortgages fell for a fourth straight week as increased borrowing costs discouraged home refinancing, an industry group's report last week said.

The Mortgage Bankers Association's index of applications fell 22.1 percent to 788.6 last week. The index of applications to refinance mortgages fell 30.7 percent to 2861.6, the Washington-based group said. Both declines were the biggest since the week that ended July 25.

"Rising mortgage rates are trimming homebuying and savaging refinancing activity," said Steven Wood, president of Insight Economics in Danville, Calif. "If mortgage rates continue to rise, housing's contribution to economic growth, both direct and indirect, will quickly fade and perhaps reverse."

Home-loan costs are the highest since early January, the association said.

The association's purchase applications index declined 9.5 percent to 432.2 last week, its lowest since the 2195.7 reported for the week that ended Jan. 9.

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