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The Mortgage Bankers Association announced today that mortgage loan applications fell for the third consecutive week, reaching their lowest level since May 2002, according to its Weekly Mortgage Applications Survey. The Market Composite Index showed applications overall declined 1.2 percent for the week ending July 28. Although the Purchase Index decreased 3.3 percent and the Refinance Index eased by 2.3 percent, long-term interest rates have begun to come down some and may be poised to drop further, providing stimulus for purchase and refinance activity. "Long-term interest rates declined slightly due to market concerns over Middle East tensions. This decline enticed more consumers to the purchase market, and provided opportunities for current homeowners to refinance out of adjustable rate mortgages and home equity lines of credit and into fixed-rate programs," says Bob Walters, chief economist of Loans. "Rates could drop further if this week's Employment Report comes in weaker than expected. The Fed will be closely scrutinizing the data to determine which direction to take short-term rates when they meet on August 8."
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