Weekly mortgage applications decrease 3% on fewer purchases, refinancings

Mortgage applications decreased for the first week in six on a decline in both purchase and refinance activity, the Mortgage Bankers Association said today.

The Mortgage Bankers Association's composite index decreased 2.1% last week to 1063.5 from 1086.6 a week earlier.

The refinance index decreased 3% to 4901.5 from 5054.0 the previous week and the seasonally adjusted purchase index decreased 0.3% to 403.9 from 405.3 one week earlier.

Meanwhile, the average rate for a 30-year fixed loan rose to 5.72% from 5.61% the prior week. The average rate for a 15-year fixed mortgage increased to 5.18% from 5.09%.

Economist Steve Affinito said mortgage rates remain relatively low, but mortgage activity is likely to remain sluggish for several quarters, as the sector resumes a more sustainable activity pace.

"Rates remain attractive, but with tougher underwriting standards and with just fewer people in the market for homes, mortgage activity will reflect the sector's doldrums through at least Q3 of this year," Affinito said. "And I must underscore it's a borrower market that favors applicants with good credit histories."