US mortgage applications extend decline with little change to rates

U.S. mortgage applications last week continued to fall, while mortgage rates held steady, according to the latest Weekly Mortgage Applications Survey released Wednesday by the U.S. Mortgage Bankers Association (MBA). The association said the Market Composite Index of U.S. mortgage applications, a measure of mortgage loan application volume, decreased 4.8 percent in the week ending Oct. 26 on a seasonally adjusted basis from the previous week. The Refinance Index dropped 6 percent from the previous week, hitting the lowest level since the end of August, with its share of mortgage activity moving down to 80 percent of total applications. The seasonally adjusted Purchase Index advanced 1 percent from a week earlier. The average contract interest rate for 30-year loans remained unchanged at 3.41 percent, the highest level since the end of September, while the interest rate for 15-year loans edged down to 2.95 percent. The U.S. Federal Reserve last month launched a third round of bond buying, which immediately dragged down long-term interest rates to new lows. Though mortgage rates have been edging up in recent weeks, they are still quite low and support house refinancing and buying. With constant improvement this year, the U.S. housing crash is said to have reached the bottom. However, many economists say the market still needs years to recover entirely as the bottom will be prolonged. In addition, superstorm Sandy would result in lower numbers in new housing sales and applications for mortgages, MBA president David Stevens said earlier this week.