The data interpreted that the housing market is cooling and it's cooling pretty substantially. Almost all recent measures of housing activity have pointed not just to a slowdown, but also to a struggling sector. Moreover, sales of homes are sliding, supply is swelling and price appreciation is abating.

Many Analysts foresee that the housing market is the key factor in Federal Reserve policy. It was the third straight week that overall mortgage activity slumped, despite a decline in interest rates during that period.

The borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.62 percent, down 0.07-percentage point from the previous week, and 0.19-percentage point below the 6.81 percent rate in the first week of July.

Seasonally adjusted purchase index of the MBA dropped for the third straight week. It shows that data is falling 3.3 percent to 376.2. It is the lowest since November 2003.

The MBA's seasonally adjusted index of refinancing applications increased 2.3 percent to 1,417.2, down 37 percent from a year ago when the index stood at 2,250.3. The refinance share of applications increased to 37.0 percent from 35.6 percent the previous week. Fixed 15-year mortgage rates averaged 6.28 percent, down from 6.31 percent the previous week.

Meanwhile, adjustable-rate mortgages, known as ARMs, have been a refuge for cash-strapped consumers seeking to buy a home with low initial mortgage payments. Rates on one-year ARMs decreased to 6.18 percent from 6.25 percent. The ARM share of activity fell to 27.8 percent of total applications -- it’s lowest since March 2004 -- from 28.6 percent in the prior week.

The survey that was conducted by the MBA covered around 50 percent of all U.S. retail residential mortgage loans. Mortgage bankers, commercial banks and thrifts were included on the number of respondents.

By M. Sese
http://realestatepress.org