Mortgage Applications Continue Steady Decline

Mortgage application volume continued to fall last week even as interest rates fell, according to the ""Mortgage Bankers Association's"":http://www.mortgagebankers.org/default.htm Weekly Mortgage Applications Survey for the week ending February 22.

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MBA's Market Composite Index, a measure of application volume, dropped 3.8 percent on a seasonally adjusted basis from the previous week. On an unadjusted basis, the index fell 3 percent. MBA noted its results did not include an adjustment for the Presidents' Day holiday.

Purchase demand showed a substantial decline last week, with the seasonally adjusted Purchase Index decreasing 5 percent and reaching its lowest level since the end of 2012. The unadjusted Purchase Index fell 2 percent, settling 14 percent higher than the same week last year.

Meanwhile, the Refinance Index decreased 3 percent week-over-week. The refinance share of mortgage activity stayed flat at 77 percent, remaining it its lowest level since early July 2012.

According to MBA's measures, the average contract interest rate for a 30-year fixed-rate mortgage dropped slightly to 3.77 percent last week. However, with points increasing 8 basis points to 0.48 (including the origination fee), MBA noted the ""effective rate"" actually increased.