Mortgage applications drop in U.S. housing market

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WASHINGTON, July 24 (Xinhua) — Mortgage applications edged down in the United States even as mortgage rates ticked down, according to a report from Mortgage Bankers Association (MBA) on Wednesday.

For the week ending July 19, MBA’s market composite index, a measure of mortgage loan application volume, dropped 1.9 percent from a week earlier.

“Mortgage applications were down last week, even as rates moved lower across the board, with the 30-year fixed rate at 4.08 percent,” said Joel Kan, associate vice president of economic and industry forecasting of MBA.

The refinance index, which measures the activity to replace higher rate mortgages with lower rate mortgages, dropped 2 percent from the previous week, according to MBA.

“Refinance activity was lower, but we did see government refinance applications increase, driven solely by a 12 percent rise in FHA (Federal Housing Administration) applications,” said Kan.

FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. Started in 1934, FHA insures mortgages on single family homes, multifamily properties, residential care facilities, and hospitals.

MBA’s purchase index before seasonal adjustment dropped 1 percent from the previous week. After removing the influences of predictable seasonal patterns, the seasonally adjusted purchase index dropped 2 percent from one week earlier, according to MBA.

“Purchase applications decreased for the second straight week and have been somewhat volatile lately, but were still 6 percent higher than a year ago,” Kan said.

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