NEW YORK — Applications for U.S. home mortgages last week fell to their slowest pace since December 2000, hurt by refinancing loan requests that are now just a quarter of March levels, an industry group reported on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 1.5 per cent to 419.3 in the week ended Aug. 15.
The MBA's seasonally adjusted index of refinancing applications dropped 3.7 per cent to 1,034.5 last week, marking the fourth drop in five weeks. The measure has roughly followed a rise in interest rates, which stand nearly three-quarters of a percentage point above March levels.
Average 30-year fixed mortgage rates last week fell to 6.47 per cent from 6.57 per cent.
Applications for mortgages mirror the slump in U.S. housing that is now in its third year, according to the drop in home prices as measured by the Standard & Poor's/Case Shiller indexes. In addition to rising rates, lenders have sharply tightened requirements for obtaining a loan, squeezing out borrowers without strong credit ratings.
Fannie Mae and Freddie Mac, the largest providers of mortgage financing via lenders, have steadily boosted the cost of selling loans into the bond market, forcing lenders to boost costs or turn away borrowers.
The MBA's index for loan requests for home purchases also bumped along near historic lows, falling 0.4 per cent to 314.
© The Globe and Mail
