U.S. mortgage applications dip slightly though rates fall: MBA

Wed Oct 2, 2013 7:02am EDT

A ''Price Reduced'' sign is displayed on a home for sale in northern Virginia suburb of Vienna, outside Washington, October 27, 2010. REUTERS/Larry Downing

A ''Price Reduced'' sign is displayed on a home for sale in northern Virginia suburb of Vienna, outside Washington, October 27, 2010.

Credit: Reuters/Larry Downing

(Reuters) - Applications for U.S. home loans dipped slightly in the latest week, as a drop in demand for purchase loans outweighed an increase in refinancing demand, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 0.4 percent in the week ended September 27.

That follows a gain of 5.5 percent in the week ended September 20.

The figures come in the first full week of data after the Federal Reserve decided not to slow its bond-buying program. The Fed's decision to keep buying $85 billion per month in Treasuries and mortgage-backed securities helped take yields on Treasuries, which are used as a benchmark in the mortgage market, to multi-month lows.

MBA data showed 30-year mortgage rates dropped 13 basis points to 4.49 percent, after earlier in September matching the 4.8 percent high for 2013. The figure for the latest week was the lowest since June.

The refinancing index gained 3.1 percent after recently hitting the lowest level since June 2009.

The mortgage survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting by Luciana Lopez in New York; Editing by Leslie Adler)

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