U.S. mortgage applications decreased last week as refinancing declined for a fourth time and fewer people bought homes, a private group's survey found.
The Mortgage Bankers Association's applications index dropped 1 percent to 689 from 696.2 the previous week. The gauge of applications to refinance existing mortgages fell 2 percent to 1852.4 from 1890.6.
Refinancing was a source of strength for consumer purchases in 2002 and 2003. The decline suggests any acceleration in spending in coming months is that much more dependent on job and income growth. Thirty-year fixed mortgage rates that are lower than they were last year keep supporting housing and the economy.
"The housing market's strength owes a lot to the easy financing terms available," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York. "Interest rates are still very close to 40-year lows and that's creating quite a boom in the housing market."
The mortgage group's gauge of applications to purchase homes fell 0.4 percent to 488.9, still close to the record of 501.6 reached in January.
Mortgage rates may be slow to rise after last week's decision by the Federal Reserve to raise the nation's benchmark lending rate, according to Bob Moulton, president of Manhasset, N.Y.- based Americana Mortgage Group. Fed policy-makers raised the federal funds rate a quarter point to 2.25 percent.