Applications for mortgage loans took a hard drop in September's first week, ending at their lowest level in nearly 14 years, according to a report from the Mortgage Bankers Association [1] (MBA).
MBA's Weekly Mortgage Applications Survey [2] showed loan applications fell 7.2 percent for the week ending September 5, declining to the lowest level since December 2000. The week's results include seasonal adjustments and an adjustment for the Labor Day holiday.
On an unadjusted basis, MBA's Market Composite Index dropped 17 percent week-over-week.
Refinances led the backslide, with applications falling 11 percent to end the week at their lowest level since November 2008, MBA reported. With the decline, the refinance share of total application activity slipped 2 percentage points to 55 percent.
The fall-off in refinancing accompanied a slight bump in interest rates. According to MBA, the average contract interest rate for a 30-year fixed-rate conforming loan was 4.27 percent for the week, up from 4.25 percent previously. It was the first increase in a month.
The seasonally adjusted Purchase Index also fell, though not as dramatically: According to the group, applications dipped 3 percent from August's final week, hitting their lowest point since February.
Removing adjustments, the Purchase Index declined 14 percent week-on-week, coming up 12 percent short of where they were last year.