Applications for U.S. home mortgages decreased last week despite a drop in mortgage rates, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity decreased 3.6 percent to 658.1 in the week ended Jan. 21, after increasing 16.2 percent in the MBA's prior week survey.
Despite a decline in mortgage rates to the lowest level in several months, U.S. consumers failed to purchase homes and refinance existing loans.
Fixed 30-year mortgage rates averaged 5.58 percent last week, excluding fees, down 6 basis points from 5.64 percent the previous week. That is the lowest level it has been since the week ended Oct 15, 2004, when the rate was at 5.54 percent. During the holiday-shortened week, the MBA's purchase index, a gauge of loan requests for home purchases, fell 2.0 percent last week to 439.0, slightly offsetting the 14.0 percent gain the previous week.
The MBA's seasonally adjusted index of refinancing applications dropped 5.7 percent to 1,932.8, after a 19.1 percent rise the prior week.
Refinancings made up 46.5 percent of all mortgage applications last week, down from 48.9 percent the previous week.
Applications for adjustable-rate mortgages fell to 31.7 percent from 32.8 percent of total applications.
One-year adjustable-rate mortgage rates averaged 4.21 percent, up from 4.13 percent one week earlier.
