U.S. mortgage applications fell for a third consecutive week even as some 30-year home borrowing costs declined to their lowest levels since April 2018 in line with lower bond yields, the Mortgage Bankers Association said on Wednesday.
The Washington-based group’s seasonally adjusted index on mortgage activity decreased 2.5 percent to 378.9 in the week ended Feb. 1.
Three weeks earlier, it reached an 11-month high at 411.8, raising hopes of a revival in the housing market that decelerated when mortgage rates rose to their highest in about 8-1/2 years in late 2018.
Interest rates on 30-year fixed-rate mortgages with loan balances of $484,350 or less averaged 4.69 percent, which was the lowest since mid-April. A week earlier, they averaged 4.76 percent.
Other mortgage rates MBA tracks were 5 basis points to 10 basis points lower than a week ago.
The week’s decline in loan applications was driven by a further pullback in requests to buy a home.
MBA’s seasonally adjusted gauge on purchase loan applications, which is seen as a proxy on future housing activity, was 4.9 percent lower at 253.10 last week.
“Despite more favorable borrowing costs...(purchase applications) are now almost 2 percent lower than a year ago,” Joel Kan, MBA’s associate vice president of industry surveys and forecasts said in a statement.
“However, moderating price gains and the strong job market, including evidence of faster wage growth, should help purchase growth going forward,” Kan said.
MBA’s seasonally-adjusted barometer on mortgage refinancing edged up 0.3 percent at 1,053.4.
The refinance share of total mortgage applications fell to 41.6 percent from 42.0 percent the previous week.