Purchase Applications Drop to Lowest Level in 5 Months

July 16, 2014

Loan demand eased this week, following a large drop in mortgage applications for home purchases, the Mortgage Bankers Association reported Wednesday in its weekly mortgage application survey, reflecting the week ending July 11.

Mortgage applications – reflecting applications for refinancings and home purchases – fell 3.6 percent for the week ending July 11. Broken out, applications for refinancings fell slightly by 0.1 percent from the previous week while the seasonally adjusted home purchase index, viewed as a leading gauge of future home sales, plunged 8 percent to the lowest level since February 2014.

The average loan size for purchase applications was $268,500, also the lowest since February 2014, the MBA reports.

Meanwhile, mortgage rates rose slightly for the week. The average 30-year fixed-rate mortgage increased from 4.32 percent the prior week to 4.33 percent, the MBA says. The average rate for a 15-year fixed-rate mortgage rose from 3.40 percent to 3.41 percent during the week. 

Source: “Mortgage Applications Drop Sharply as Purchases Plummet,” HousingWire (July 16, 2014)