Applications for home mortgages and refinancing barely budged for the week, growing just four-tenths of one percent, according to the Mortgage Bankers Association, despite the lowest mortgage rates in the surveys history. Refinances grew at the highest rate, but home purchase applications were marginal.
The refinance index rose just 0.6% from last week and the seasonally adjusted purchase index was up a slight 0.3%. The drop represents a 34.1% reduction in mortgage applications from the same week a year ago. The decline indicates a further slow down in home purchases after the expiration of the federal tax credit. Analysts expected a drop-off in purchases.
Concerns about the nation’s economy could lead policymakers in Washington, D.C. to take additional actions to stimulate the housing market. Congress may re-establish the tax credit for home buyers if housing markets don’t develop improving sales.
For more than two months refinances held the largest share of mortgage applications, growing to 78.1% of all applications. Low fixed rate mortgages compose the over-whelming majority of applications for home loans, but the percentage of adjustable rate mortgages of the market rose slightly to 5.9%.
The average rate for a 30-year fixed rate mortgage dropped to 4.57% in the Mortgage Bankers survey, the lowest it has been in the survey’s history. The figure represents a three-one-hundredth of a percent decline from the previous week.
The average rate for a 15-year fixed rate mortgage also declined a small eight-one-hundredths of one percent to 3.95%. Mortgage holders who are able to qualify for a loan and afford the payment on a 15-year fixed rate loan can save thousands of dollars in interest charged over the lifetime of a mortgage.