Mortgage applications decline in first week of September

Labor Day holiday limited borrowers, report says

September 18, 2005|By BLOOMBERG NEWS

WASHINGTON - Mortgage applications fell in the first week of September as the Labor Day holiday kept some borrowers out of the market, a private report showed.

The Mortgage Bankers Association's applications index fell 1.4 percent to 760.6 in the week ended Sept. 9 from 771.6 the prior week, the group reported.

Applications for loans to refinance mortgages fell 6.7 percent to 2,198.7 from 2,357.1 the previous week.

Mortgage applications tend to fall off in the days around Labor Day and probably will rebound, said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York.

Home sales will set a record this year, the National Association of Realtors said last week as it raised its forecasts for 2005 and 2006.

"Applications tend to bunch up ahead of the Labor Day weekend, so there is temporarily less demand in the following week," said Rupkey, before the report. "The housing market has shown itself to be bullet-proof in recent years."

Applications for loans to purchase homes rose 2.9 percent to 513.4 from 499.1, the second straight gain.

The percentage of applications for adjustable-rate mortgages rose to 28.2 percent of total applications from 26.5 percent the previous week, the association said.

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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