U.S. mortgage applications fell to seven-month lows last week as demand for home refinancing loans also fell by 30 percent, data from the Mortgage Bankers Association group showed on Wednesday. The Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended June 26 decreased 18.9 percent to 444.8, the lowest reading since the week ended November 21, 2008. Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, said mortgage rates are just one factor driving potential borrowers. “Rising unemployment, concerns about job security, potential buyers' inability to sell their existing homes and problems with appraisals coming in too low are all weighing on demand,” he said. “The government needs to take more aggressive action to bring mortgage rates back down to below 5 percent as that seems to be a key level for the market,” he added. Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.34 percent, down 0.10 percentage point from the previous week, but significantly higher than the all-time low of 4.61 percent set in the week ended March 27. The survey has been conducted weekly since 1990. Mortgage rates remained above 5 percent for a fifth straight week, but were well below year-ago levels of 6.33 percent. Thirty-year mortgage rates had mostly been on a downward trend since the Federal Reserve unveiled its plan to buy mortgage-backed debt in late November.
