Mortgage application volume fell last week

Refinance applications hit their lowest levels of the year. Interest rates on home loans rise.

June 18, 2008: 8:07 AM EDT

WASHINGTON (AP) -- Mortgage application volume fell 8.7% during the week ended June 13, according to the Mortgage Bankers Association's weekly application survey.

The MBA's mortgage application index fell to 508.4 during the week, from 557.1 the previous week.

Refinance application volume tumbled 15%, while purchase activity declined 4.3% during the week. Refinance applications accounted for 37.4% of all applications - the lowest level all year.

The index peaked at 1,856.7 during the week ending 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 508.4 means mortgage application activity is 5.084 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 rose. The average rate for traditional, 30-year fixed-rate mortgages rose to 6.57% during the week ended June 13, from 6.24% the previous week.

Rates for 15-year fixed-rate mortgages, a popular option for refinancing a home, rose to 6.14% from 5.78%.

The average rate for one-year adjustable-rate mortgages jumped to 7.22% from 6.87%.