On Wednesday, weekly applications for U.S. home mortgages dropped to their lowest levels in five months even as borrowing costs fell, according to data from an industry group. The Mortgage Bankers Association noted its seasonally adjusted index of mortgage activity for home purchases, a main measurement of housing sales, dropped 2% last week to its lowest levels since February.
Last week, interest rates on 30-year fixed-rate mortgages, the most broadly held type of U.S. home loans; dropped in connection with benchmark Treasury yields. 30-year loan rates saw more than three-year low in July as longer-dated U.S. yields had dropped to all-time lows on concerns over global economic growth and vast overseas demand for U.S. bonds.
The MBA’s seasonally adjusted measure on refinancing applications declined 4 percent from the prior week. It hit its highest level since June 2013 in the week ended on July 8. The group’s seasonally adjusted index of total mortgage activity dropped 3.5% from last week. It dropped for its third consecutive week following reaching a three-year high in July.
The share of weekly refinancing requests was 60.7 percent of total applications, compared with 61.1 percent the previous week, the Washington-based group added. The median rate of “conforming” thirty-year home mortgages, or loans with balances of $417,000 or less, dropped to 3.67% last week from 3.69%, MBA stated.
The average 30-year rate reached 3.60 percent in the week ended July 8, which was the lowest since May 2013 and not far from the historic low of 3.47 percent reached in December 2012, according to MBA data. Lastly, the benchmark 10-year Treasury yield declined to a record low of 1.321 percent on July 6. It was 1.540 percent on Wednesday, advanced from late on Tuesday, according to data.