Mortgage applications decrease for 4th week in 5

August 28, 2005|By BLOOMBERG NEWS

U.S. mortgage applications declined for a fourth week in five as an index measuring home purchases fell by the most since early July.

The Mortgage Bankers Association said Wednesday that its gauge of purchase and refinancing applications dropped 0.7 percent to 756.2 in the week ending Aug. 19 from 761.3. Purchase applications decreased to 488.4, a 2.2 percent fall that was the biggest since the week ending July 8.

Mortgage rates "are still at levels that are conducive to home sales," said Bob Walters, chief economist at Quicken Loans Inc. "We're just seeing a strong desire for real estate."

The mortgage bankers group's gauge of applications to refinance existing mortgages rose 1.2 percent to 2,313.9, from 2,285.5 the previous week.

The share for adjustable-rate mortgages fell to 28.1 percent of total applications from 28.9 percent the week before. The percentage of applications for adjustable-rate mortgages has fallen since March, when it was as high as 36.6 percent, suggesting people are locking in long-term rates in anticipation of higher borrowing costs in the coming months.

The Mortgage Bankers Association survey covers about half of all U.S. retail residential mortgage originations and has been compiled every week since 1990.

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