US mortgage applications near flat as purchase demand falls -MBA

Reuters

Oct 16 (Reuters) - Applications for U.S. home loans roseslightly in the latest week as increased refinancing activityoffset a decline in demand for purchase loans as the U.S.government shutdown weighed, data from an industry group showedon Wednesday.

The Mortgage Bankers Association said its seasonallyadjusted index of mortgage application activity, which includesboth refinancing and home purchase demand, rose 0.3 percent inthe week ended Oct. 11. That follows a gain of 1.3 percent inthe week ended Oct. 4.

The figures come as the U.S. federal government shutdown hascast a spotlight on fiscal policy, with some economists worryingthat the stalemate in Congress could drag on the economy.

That shutdown affected the mortgage market, the MBA said.

"Purchase applications for government programs dropped bymore than 7 percent over the week to their lowest level sinceDecember 2007, and the government share of purchase applicationsdropped to its lowest level in almost three years," MikeFratantoni, MBA's vice president of research and economics, saidin a statement.

MBA data showed 30-year mortgage rates edged up 4 basispoints to 4.46 percent, but rates were still down from Septemberwhen they matched the 4.8 percent high for 2013.

The refinancing index gained 3.3 percent after recentlyhitting the lowest level since June 2009. In contrast, the gaugeof loan requests for home purchases, a leading indicator of homesales, fell 4.8 percent.

The mortgage survey covers over 75 percent of U.S. retailresidential mortgage applications, according to MBA.

Rates

View Comments (5)