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Mortgage Applications Fall 7.1%, Prompted by Refinance Decline

Mortgage applications decreased 7.1 percent over the week last week with an 8 percent decline in refinance applications contributing largely to the decrease, according to the ""Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey."":http://www.mbaa.org/NewsandMedia/PressCenter/81139.htm

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The decline was the same for an unadjusted and seasonally adjusted index.

The percentage of mortgage applications made up by refinance applications fell slightly from 80 percent the previous week to 79 percent for the week.

Purchase applications fell 1 percent on a seasonally adjusted basis, 2 percent on a non-seasonally adjusted basis.

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The unadjusted purchase index is down 3 percent from the same week last year.

The decline in refinance applications is the result of ""a fall-off in refinance applications for government loans, which had more than doubled the prior week,"" said Michael Fratantoni, VP of research and economics at the ""MBA."":http://www.mbaa.org/default.htm

""The large swings in activity were due to the implementation of FHA's new premiums on streamline refinances, and borrowers timing their applications to their lower premiums,"" Fratantoni added.

Adjustable-rate mortgage (ARM) applications made up about 4 percent of applications for the week, according to the MBA.

Interest rates for 30-year fixed-rate loans ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô with both conforming and jumbo loan balances ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô increased slightly for the week. Interest rates for conforming loans increased from 3.87 percent (0.4 point) to 3.88 percent (0.35 point), while rates for jumbo loans rose from 4.06 percent to 4.12 percent.

Interest rates for 5/1 ARMs also increased, rising from 2.75 percent (0.33 point) to 2.81 percent (0.41 point).

Interest rates for 30-year fixed-rate mortgages backed by the Federal Housing Administration and 15-year fixed-rate mortgages both decreased over the week. Rates for 30-year, fixed-rate, FHA-backed loans fell from 3.72 percent (0.47 point) to 3.71 percent (0.46 point).

Rates for 15-year fixed-rate loans fell from 3.25 percent (0.45 point) to 3.24 percent (0.44 point).

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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