NEW YORK – U.S. mortgage applications fell for a second consecutive week as interest rates on home loans climbed to 16-month highs, an industry trade group said on Wednesday.
The Mortgage Bankers Association (search) said its index of mortgage application volume for the week ended October 28 declined 4.8 percent to 646.7, its lowest point since the start of April when the index was at 644.5. The index is down from the previous week's 679.1.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.21 percent last week, up 0.15 of a percentage point from the previous week's 6.06 percent.
It was the highest rate on the 30-year fixed-rate mortgage, the industry benchmark, since June 2004 when the rate hit 6.34 percent.
It is also higher than where it stood a year ago when the rate was 5.65 percent. The fixed 30-year mortgage rate has been climbing on and off since hitting a 2005 low of 5.47 percent in late June.
Other interest rates on popular mortgage loans also climbed last week, according to the MBA.
Fixed 15-year mortgage rates averaged 5.75 percent, up from 5.57 percent in the previous week, while rates on one-year adjustable-rate mortgages increased to 5.39 percent from 5.37 percent.
MARKED FALL IN HOME PURCHASE LOANS
By industry subcomponents, the MBA's purchase mortgage index, considered a timely gauge on U.S. home sales, fell 6.2 percent to 437.6 from the previous week's 466.4.
The refinancing applications index dropped 2.8 percent to 1,862.8 from 1,916.8 in the previous week.
All the indices were seasonally adjusted.
The MBA's survey covers about 50 percent of all U.S. retail residential mortgage originations. Respondents include mortgage bankers, commercial banks and thrifts.