For the first time in a month, the consumer demand for home loans in the US dropped last week, as low interest rates failed to attract borrowers to refinance their mortgage payments, according to the data released by the Mortgage Bankers Association (MBA).
The data showed that the overall volume of mortgage applications, including refinancing loans and new purchases, fell 10.9 percent on a seasonally-adjusted basis that ended on 22 January 2010.
MBA’s refinance index declined 15.1 percent from the previous week, with refinancing shares of mortgage activity falling to 67.6 percent of the total application, compared to 71.7 percent from a week earlier. New purchase requests also dropped down to 3.3 percent from the week before.
“Refinance activity fell substantially last week,” said Michael Fratantoni, vice-president of research and economics at MBA. “Although rates remain low, there appears to be a smaller pool of borrowers who are willing and able to refinance at today’s rates.”
MBA’s analysis showed that the mortgage interest rate slightly surged last week, although long-term rates remained at historically low levels.
MBA also reported that the rate for average contract interest of 30-year fixed-rate mortgages slightly increased to 5.02 percent from 5 percent. Also, the 15-year fixed-rate mortgage rates increased from last week’s 4.33 percent to 4.34 percent.