Mortgage activity slowest since Jan. 7

December 04, 2005|By BLOOMBERG NEWS

WASHINGTON -- Mortgage applications declined for the fifth time in six weeks as fewer homeowners refinanced, a private group's survey showed.

The Mortgage Bankers Association's index of applications fell 1.8 percent in the week that ended Nov. 25 to 624.1, the lowest level since Jan. 7, from 635.4. The group's measure of refinancing dropped 6.3 percent to 1,484.3, its lowest since June 2004, from 1,584.1.

Refinancing has slumped 22 percent in the past year, removing a source of cash for consumers as rising mortgage rates make it less beneficial for homeowners to tap into the equity in their properties.

While Thursday's report showed a rise in home purchase applications, the index is down 10 percent from the record level reached in June, supporting forecasts for a slowdown.

"The housing market is slowing moderately," said Scott Anderson, senior economist at Wells Fargo & Co. in Minneapolis. Rising mortgage rates are "certainly going to weigh a bit on housing as we get further into the winter and the spring months."

The Mortgage Bankers Association's measure of applications to purchase a home rose 0.8 percent to 476.2 from 472.3, the third gain in six weeks. It has declined since reaching a high of 529.3 June 10.

Refinancing applications as a share of total loan applications fell to 39.1 percent from 39.9 percent. Applications for adjustable-rate loans declined to 33 percent from 33.2 percent of the total, the mortgage bankers said.

The 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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