A gauge of U.S. mortgage applications fell last week to the lowest level of the year as home purchases and refinancing declined, a sign housing will be less of a source of strength for the economy.
The Mortgage Bankers Association’s weekly application index dropped 1.6 percent to 565.0 from 574.4. The Washington-based group’s purchase gauge fell 2.3 percent to 393.6 from 403.0. …
Purchase applications are down 26 percent since reaching a high in June of last year, the mortgage bankers group said.
The mortgage bankers group’s gauge of refinancing fell 0.6 percent to 1574.5 from 1583.6. The index is down 47 percent from a 12-month high reached in June.
Purchase applications have been sliding downward rather dramatically since last summer. If current mortgage applications are at the lowest levels of the year, it’s highly unlikely that we’re going to see any “Spring Boom” this year. While sales will certainly pick up above February levels, it looks like sales volume this year will continue to be significantly lower than levels set in the previous years. Many housing economists are calling for 2006 to be a record year, if the trends that begun in the Fall and through Q1 continue, I can’t see how that will be the case.