Mortgage application index falls 7.2 percent

Home purchasing index also down, by 6.1 percent

July 17, 2005|By BLOOMBERG NEWS

WASHINGTON - An index of home mortgage applications fell after reaching its second-highest level in more than a year, a private group's survey showed.

The Mortgage Bankers Association's measure of home purchases and refinancing declined 7.2 percent to 791.9 in the week ended July 8, which included the July 4 holiday, from 853.4 the week before.

The group's home purchase index fell 6.1 percent to 489, still above an average of 455 last year, when sales were the highest ever.

"If you look at mortgage application data as of last week, we were pretty much on historical highs for the purchase index, which does suggest continued strength," said Stephen Stanley, chief economist at RBS Greenwich Capital, before the report. "When prices are going up, people who are buying say, `We better get in before prices go up even more.'"

The report showed the average rate on a 30-year fixed mortgage rose to 5.62 percent from 5.58 percent. The record low, reached in June 2003, was 4.99 percent.

Applications to refinance existing mortgages fell 8.4 percent to 2,554.3, from 2,788.2, the mortgage banker's group said. The share of applications to refinance fell to 45.1 percent of all mortgage applications from 45.7 percent the previous week.

The share of applications for adjustable-rate mortgages fell to 27.9 percent from 30.7 percent of total applications the previous week. The average one-year adjustable-rate mortgage fell to 4.56 percent from 4.6 percent.

The average rate on a 15-year mortgage rose to 5.21 percent from 5.18 percent.

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