January 24 2007: 7:45 AM EST
NEW YORK (Reuters) -- U.S. mortgage applications for both home purchase and refinancing loans dropped last week as interest rates rose, an industry trade group said Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended Jan. 19 skidded 8.4 percent to 611.3.
Bankrate.com
Current Mortgage Rates
Type Overall avgs
30 yr fixed mtg 5.78%
15 yr fixed mtg 5.56%
30 yr fixed jumbo mtg 6.05%
5/1 ARM 5.58%
5/1 jumbo ARM 5.75%
Find personalized rates:
As housing affordability goes up, homebuyers are looking to exotic mortgages and taking on greater risk.
The four-week moving average of mortgage applications, which smooths the volatile weekly figures, rose 2.2 percent.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.22 percent, edging up 0.03 percentage point from the previous week. Interest rates were also above year-ago levels of 6.04 percent.
Is your real estate agent on your side?
The MBA's seasonally adjusted purchase index, widely considered a timely gauge of U.S. home sales, slumped 8.4 percent to 402.7. The index was also sharply below its year-ago level of 473.7.
The group's seasonally adjusted index of refinancing applications decreased 9.6 percent to 1,848.8, its first drop in four weeks. A year earlier the index stood at 1,773.9.
The refinance share of applications decreased to 47.8 from 49.9 percent the previous week.
Fixed 15-year mortgage rates averaged 5.93 percent, up from 5.92. Rates on one-year adjustable-rate mortgages (ARMs) increased to 5.91 from 5.85 percent.
The ARM share of activity decreased to 20.3 from 21.2 percent the previous week.
The MBA's report precedes other data this week gauging the state of the U.S. housing market.
The National Association of Realtors will release data on sales of U.S. existing homes Thursday. The Commerce Department will release data on sales of new homes Friday.
The MBA's survey covers about 50 percent of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.