July 24, 2019 / 4:35 PM / 3 months ago

U.S. mortgage applications drop in latest week - MBA

NEW YORK, July 24 (Reuters) - U.S. mortgage applications decreased last week, as expensive materials and shortages of land and labor have constrained builders’ ability to produce more affordable housing, the Mortgage Bankers Association said on Wednesday.

The Washington-based group’s seasonally adjusted index on loan requests, both to buy a home and refinance one, fell 1.9 percent to 490.8 from 500.2 in the week ended July 19.

“Purchase applications decreased for the second straight week and have been somewhat volatile lately, but were still 6 percent higher than a year ago,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.

The group’s barometer on loan applications for home purchases, which is seen as a proxy on future housing activity, fell 1.6 percent to 260.8.

The Commerce Department said on Wednesday new home sales rebounded 7.0% to a seasonally adjusted annual rate of 646,000 units in June. However, sales for the prior three months were revised down as May’s sales pace was revised down to 604,000 units from the previously reported 626,000 units.

Most fixed-mortgage MBA tracks were decreased by as much as 4 basis points from the week before.

For example, interest rates on 30-year fixed-rate “conforming” mortgages, or loans whose balances are $484,350 or less, averaged 4.08% last week, lower than the previous week’s 4.12%.

MBA’s seasonally adjusted gauge on refinancing declined 2.1% to 1,789.8 from prior week’s 1,827.3.

“Refinance activity was lower, but we did see government refinance applications increase, driven solely by a 12 percent rise in FHA applications,” Kan said. (Reporting by Evan Sully Editing by Chizu Nomiyama and Jonathan Oatis)

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