NEW YORK – Applications for U.S. home mortgages fell for the second consecutive week despite a steady decline in fixed mortgage interest rates in August, an industry group's figures showed on Wednesday.
The Mortgage Bankers Association (search) said its seasonally adjusted index of mortgage applications — which includes both purchase and refinancing loans — fell 4.5 percent to 722.5 in the week ended August 26. In the previous week, the index fell 0.7 percent.
The MBA's seasonally adjusted purchase index dropped 3.6 percent to 470.6, adding to the previous week's 2.2 percent loss.
The MBA's seasonally adjusted refinancing index fell 5.4 percent to 2,187.8, more than erasing the previous week's 1.2 percent gain.
Fixed 30-year mortgage rates (search) fell 5 basis points, or 0.05 of a percentage point, to an average of 5.73 percent, excluding fees, compared with 5.78 percent in the previous week. The 30-year rate, considered the industry benchmark, has steadily declined from 5.91 percent in the week ending August 5.
The 30-year rate is below the 2005 high of 6.08 percent reached in late March and above the 2005 low of 5.47 percent of late June. It is also slightly higher than where it stood a year ago when it was 5.75 percent.
Fixed 15-year mortgage rates last week averaged 5.36 percent, down from 5.41 percent the previous week.
Rates on one-year adjustable-rate mortgages increased to 4.88 percent last week from 4.84 percent one week earlier.
Demand for adjustable-rate mortgages (search) fell for a third consecutive week. ARMs accounted for 27.8 percent of total applications last week, down from 28.1 percent the previous week and a 2005 high of 36.6 percent in late March.
With ARMs, low initial payments allow borrowers to buy homes they may not be able to afford with a fixed-rate loan.
Thirty- and 15-year fixed-rate mortgages comprise about 70 percent of the market, with ARMs accounting for nearly all the rest, the MBA recently said.
In its data for the week ending August 26, the MBA said refinancings increased as a percentage of all mortgage applications, up to 43.8 percent from 43.7 percent.
The MBA's survey covers about 50 percent of all U.S. retail residential mortgage originations. Respondents include mortgage bankers, commercial banks and thrifts.
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