Despite Low Rates, Mortgage Applications Down Again

Posted on 18 November 2009

According to the Mortgage Bankers Assn. survey released today, applications for new home loans have continued to shrink, despite the lowest mortgage rates since May.

mortgage applications

Applications that adjusted seasonally, for purchase loans decreased 4.7% during the last week as compared with the week before. Applications were down by 1.4%, in the refinance market as told by the trade group’s weekly survey.

The rates for 30-year fixed mortgages dropped in September to below 5%, in order to bring about a mini-boom in mortgage applications, particularly for refinance loans.

However, a very small number of people across the country have applied for new loans even though rates have continued to decline.

The Mortgage Bankers Assn. survey assumed borrowers had good credit and a 20% down payment or equity in their home.

According to the survey, the average contract interest rate for 30-year fixed-rate mortgages decreased to 4.83% from 4.90%. This is the lowest contract rate observed by the survey since mid-May of this year.

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