Mortgage Applications Decline

Applications to purchase homes declined 8.5 percent last week compared to the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association weekly survey.

The unadjusted purchase index declined 8.3 percent compared with the previous week and was down 37.1 percent compared to the same week a year ago.

“Last week saw a big jump in applications for FHA loans to purchase homes. We surmised that this was due to potential buyers wanting to beat the stricter FHA standards that went into effect October 4. This conjecture was confirmed by the fact that this week FHA applications fell back to a level closer to the average seen over the past four months, ” said Michael Fratantoni, MBA’s vice president of research and economics.

The 30- and 15-year mortgage rates declined to the lowest ever recorded by the survey, the bankers said:

· 30-year fixed-rate mortgages decreased to 4.21 percent from 4.25 percent.
· 15-year fixed-rate mortgages decreased to 3.62 percent from 3.73 percent.
· 1-year ARMs decreased to 7.03 percent from 7.11 percent.

Source: Mortgage Bankers Association (10/13/2010)

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