Mortgage applications slide again

For the third week in a row, home finance applications fall as interest rates rise steadily.

February 27 2008: 7:53 AM EST

WASHINGTON (AP) -- Mortgage application volume tumbled 19.2% during the week ended Feb. 22, according to the Mortgage Bankers Association's weekly application survey.

The MBA's application index fell to 665.1 from 822.8 the previous week. It was the third straight week application volume fell. During that time, volume has dropped 39% as interest rates have risen steadily.

Application volume fell as refinance volume plummeted 30.4% during the week. Purchase volume increased 0.2%.

Refinance volume accounted for 52% of total mortgage applications. Refinance applications accounted for 73% of all application activity about a month ago.

The index peaked at 1,856.7 during the week ended May 30, 2003, at the height of the housing boom.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 665.1 means mortgage application activity is 6.651 times higher than it was when the MBA began tracking the data.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50% of all residential retail mortgage originations each week.

Application volume declined as interest rates continued to rise. The average rate for traditional, 30-year fixed-rate mortgages increased to 6.27% from 6.09%. In 2008, the average rate was as low as 5.49% during the week ended Jan. 18.

The average rate for 15-year fixed-rate mortgages, often used for refinancing a home, increased to 5.77% from 5.55%.

The rate on one-year adjustable-rate mortgages increased to 5.84% from 5.72%.