Mortgage applications down despite low rates

Despite the continued fall in mortgage rates this past week, mortgage activity declined for the third consecutive week. The Mortgage Banker's Association's recent mortgage applications index dropped 4.9 percent for the week ending September 2, with the refinancing application index down 6.3 percent and loan requests for home purchases up 0.2 percent.

Mike Fratantoni, vice president of research and economics for MBA, said purchase application[s] remained at low levels not seen since 1996.

"Despite these rates, refinance application volume fell for the third straight week and is more than 35 percent below levels at this time last year," Fratantoni said.

Zillow recently reported the 30-year fixed mortgage rate fell to 3.92 percent, down 15 basis points from 4.07 percent last week[. The rate for a 15-year fixed home loan was 3.17 percent. Since its launch in April 2008, the current rates are the lowest recorded by Zillow.

Some markets are showing improvement, despite the poor economic data. According to the first American Improving Markets Index from the National Association of Homebuilders, 12 markets have improved for at least six months in housing permits, employment and housing prices. Markets showing growth include New Orleans, Louisiana, Pittsburgh, Pennsylvania, and Anchorage, Alaska.  

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