Applications for home loans decline

Weekly mortgage index is down 28 percent compared to the same period one year ago, says Mortgage Bankers Association.
June 7, 2006: 7:36 AM EDT

NEW YORK (CNNMoney.com) - The number of people applying for home loans fell last week, an industry group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended June 2 fell 1.4 percent to 534.4 from the previous week's 541.9.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.60 percent, down 0.06 of a percentage point from the previous week.

The MBA's seasonally adjusted purchase mortgage index rose slightly to 395.6 from the previous week's 395.5. The index is considered a reliable gauge of U.S. home sales.

The trade group's seasonally adjusted index of refinancing applications fell 3.8 percent to 1356.0 from 1409.0 the previous week.

The refinance share of mortgage activity decreased to 34.2 percent of total applications, from 34.9 percent last week.

The percentage of adjustable-rate mortgage activity decreased to 29.4 percent of applications, from 30.7 percent prior.

Low mortgage rates have been behind the major U.S. housing boom during the last five years.

Fixed 15-year mortgage rates increased to 6.23 percent from 6.22. Rates on one-year adjustable-rate mortgages decreased to 6.05 percent from 6.09 percent.

The MBA's survey covers about 50 percent of residential mortgage bankers and thrifts.