Mortgage applications decreased 9.3% for the week ended June 20, 2008, the Mortgage Bankers Association announced Wednesday.
The Mortgage Bankers Association's composite index of applications declined to 461.3, on a seasonally-adjusted basis from last week's 508.4. Compared to a year ago, the composite index is down 25.3% on an unadjusted basis.
Also, the Refinance Index decreased 12.1% to 1,212.2 from 1,378.6 the previous week and the seasonally adjusted Purchase Index decreased 7.4% to 333.4 from 360.2 one week earlier.
Mortgage rates dip
Meanwhile, the average rate for a 30-year fixed loan decreased slightly to 6.39% from 6.57% the prior week. The average rate for a 15-year fixed mortgage decreased to 5.95% from 6.14%.
Also, the share of applications that involved a refinance declined to 36.3% from 37.4% one week earlier.
Created in 1990, the Mortgage Bankers Association's loan survey covers about half of all U.S. retail residential mortgage originations.
Economic Analysis: This is not what the U.S. Federal Reserve intended when it initiated its interest rate easing cycle in September 2007. Mortgage rates remain too high. A housing assistance and mortgage reform package winding its way through the U.S. Congress will offer some housing sector stimulus. However, for the housing sector to regain its sea legs -- and to help increase U.S. commercial activity -- mortgage rates must move toward the lower end of their 10-year average range, ideally below 6% for a 30-year fixed rate mortgage.
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