NEW YORK Applications for home mortgages slipped for a second consecutive week as borrowing rates crept higher, according to data published by an industry group on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity decreased 4.6 percent to 593.3 in the week ended May 23. It was the lowest level since the week ended April 25, suggesting tight credit conditions and falling home prices continued to depress the housing market.
Fixed 30-year mortgage rates averaged 5.96 percent last week, up 6 basis points from the previous week, the MBA said. Rates on one-year adjustable-rate mortgages jumped to 6.92 percent in the week from 6.71 percent a week earlier.
The MBA's seasonally adjusted index of rate-sensitive refinancing applications fell 8.9 percent to 2,013.5 last week. The gauge of loan requests for home purchases was little changed at 352.7 compared with 352.5 in the previous week.
Recent data has offered tentative signs that the worst housing bust in decades may be nearing a bottom, although most economists still forecast a glut of homes for sale will keep the market soft through 2009.
U.S. home prices that fell a record 14.1 percent last quarter are expected to drop another 10 percent through next year as the market "painfully" clears the overhang of homes for sale, Lehman Brothers economists said after a report on home prices on Tuesday.
(Reporting by Albert Yoon; Editing by Tom Hals)