NEW YORK – U.S. mortgage applications slumped last week, weighed down by a plunge in demand for home refinancing loans, as interest rates climbed from recent lows, an industry trade group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended December 15 decreased 10.2 percent to 647.6 from the previous week's 721.2, which was its highest level in over a year.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.10 percent, up 0.08 percentage point from the previous week. Two weeks prior, 30-year mortgage rates fell to 5.98 percent, the lowest level since October 2005.
Interest rates, however, were below year-ago levels of 6.22 percent.
The MBA's seasonally adjusted purchase index fell 5.9 percent to 436.5. The index was also below its year-ago level of 453.1.
The purchase index is considered a timely gauge of U.S. home sales.
The group's seasonally adjusted index of refinancing applications decreased 14.6 percent to 1,968.8. A year earlier the index stood at 1,418.1.
The refinance share of applications decreased to 50.8 percent from 52.6 percent the previous week.
Fixed 15-year mortgage rates averaged 5.82 percent, up from 5.75 percent. Rates on one-year adjustable-rate mortgages (ARMs) increased to 5.82 percent from 5.76 percent.
The ARM share of activity decreased to 23.6 percent of total applications from 24.9 percent the previous week, its lowest since October 2003.
The MBA's survey covers about 50 percent of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.