Mortgage applications slip 5.3% as 30-year rate falls to 7.41%

According to the Mortgage Bankers Association, mortgage applications fell 5.3% in the latest week compared with the prior week on a seasonally adjusted basis. Purchase applications declined by 7% and refinance applications by 2% as the average 30-year fixed-rate contract dropped to 7.41% from 7.50%, the first dip in more than two months. Points on 20%-down loans fell to 0.75 from 0.83, reflecting lower origination costs.

MBA economist Joel Kan noted that the rate reduction was insufficient to revive demand, with both purchase and refinance activity still lagging. Purchase applications are now 18% below the same week a year earlier, while refinance requests sit 59% lower than a year ago. Adjustable-rate mortgages made up 10.5% of applications, offering rates about a full percentage point below the 30-year fixed rate, providing a cheaper option for qualified borrowers.