Mortgage applications fall 2.9 percent despite best rates in decades

From The Associated Press, July 14, 2010 - 09:36 AM
WASHINGTON (AP)

Applications for home loans dipped last week even though consumers were able to refinance at the lowest rates in decades.

The Mortgage Bankers Associations says overall applications decreased nearly 3 percent from a week earlier. That incorporates an adjustment for the Independence Day holiday.

Applications to refinance home loans were down 2.9 percent. Applications taken out to purchase homes fell 3.1 percent, which the MBA said reduced its index to the lowest level since December 1996. The MBA doesn't publish the actual index.

Applications to refinance loans made up nearly 79 percent of total applications.

Mortgage rates have fallen since mid-April after investors, nervous about Europe's debt crisis and the global economy, have shifted money into safe Treasury bonds. That has caused the yields on those bonds to fall. Long-term fixed mortgage rates tend to track those yields.

The average rate for a 30-year fixed loan sank to 4.57 percent last week, according to Freddie Mac. That was the lowest since the mortgage company began keeping records in 1971.

The Mortgage Bankers Association's survey covers more than 50 percent of all applications nationwide and has been conducted since 1990.