It might be hot outside but its freezing in the inboxes of hundreds of the nation’s mortgage lenders. Last week applications fell to their lowest level since February.
Maybe it’s just a sign that the selling season is winding down. More likely it’s something a lot more serious—yet another signal that the housing recovery is seriously sick and keeps getting sicker.
Mortgage applications decreased last week from the previous week, led by a drop in purchase loan requests. The Mortgage Bankers Association’s index revealed that loan application volume fell 3.6% on a seasonally adjusted basis for the period ending July 11 after increasing the previous week, which included an adjustment for the July 4 holiday.
The dip in mortgage activity was mainly attributed to an 8% decline in purchase applications. These applications, where the average loan size sought was $268,500, plunged to their lowest level since February, the Washington-based trade group said on Wednesday. Meanwhile, refinance activity was only down 0.1% from the prior week.
Yet this time no one is attributing the decline to interest rates. Bankrate reports that mortgage rates dropped to record lows again last week after a sluggish employment report disappointed investors. The 30-year fixed-rate mortgage fell 8 basis points to 3.79 percent. The 15-year fixed-rate mortgage fell 8 basis points to 3.05 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, fell 3 basis points to 4.44 percent.