Mortgage applications decreased 6.7 percent over the week ending June 19, while interest rates also fell, finding new lows in some categories, according to the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA).[IMAGE]
Refinances still make up a majority of applications ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô 78 percent for the week, slightly lower than the 79 percent share recorded the previous week. The amount of refinance applications fell 8 percent over the week.
According to the MBA, the drop largely occurred among government refinance loans.
HARP 2.0 refinance applications stood at 20 percent three weeks ago but have been at 24 percent for the past two weeks.
""Paul Diggle"":http://www.capitaleconomics.com/staff/property-economics/paul-diggle.html, property economist with ""Capital Economics"":http://www.capitaleconomics.com/, responded to June's application data stating that the rise in refinances during the month ""will contribute to the ongoing decline in mortgage delinquencies,""[COLUMN_BREAK]
even while ""the benefits will be limited by the fact that borrowers in the most trouble ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô for example, those who are already behind on a few months' payments ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô continue to face considerable hurdles to refinancing their mortgage.""
Additionally, while purchase applications in June ""remained stuck in the doldrums,"" according to Diggle, ""this isn't preventing a modest housing recovery from taking place.""
Purchase applications last week increased less than 1 percent, and the unadjusted purchase index is 7 percent lower than the same week last year.
Mortgage rates continue to come in at record low prices, and ""for the first time ever, on the MBA measure at least, the average 30-year mortgage rate starts with a three,"" Diggle noted.
The interest rate for a 30-year fixed-rate conforming mortgage fell to 3.86 percent (0.41 point) for the week, the lowest rate the MBA has recorded.
The 30-year fixed rate FHA-backed mortgage also reached a new low, 3.69 percent (0.50 point). The previous week's rate was 3.71 percent (0.46 point).
The 30-year fixed rate jumbo mortgage also fell to its second-lowest rate on record, 4.08 percent (0.38 point) from 4.12 percent (0.35 point) the previous week.
The rate for a 15-year fixed rate mortgage was 3.20 percent (0.47 point), below last week's 3.24 percent (0.44 point). This is also a new low.
The rate for 5-year and 1-year adjustable-rate mortgages fell but did not break any records. The rate decreased from 2.81 percent (0.41 point) to 2.76 percent (0.45 point).