[NEW YORK] Weekly applications for US home mortgages fell to their lowest level in five months even as borrowing costs declined, according to data from an industry group released on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage activity for home purchases, a leading indicator of housing sales, fell 2 per cent in the week ended on July 29 to its lowest level since late February.
Interest rates on 30-year fixed-rate mortgages, the most widely held type of US home loans, declined last week in step with benchmark Treasury yields.
Thirty-year loan rates hit a more than three-year low last month as longer-dated US yields had fallen to historic lows on worries about global economic growth and immense overseas demand for US bonds.
The MBA's seasonally adjusted gauge on refinancing applications fell 4 per cent from the prior week. It reached its highest level since June 2013 in the week ended on July 8.
The group's seasonally adjusted index of total mortgage activity fell 3.5 per cent from the previous week. It was down for the third straight week after hitting a three-year peak in July.
The share of weekly refinancing requests was 60.7 per cent of total applications, compared with 61.1 per cent the previous week, the Washington-based group said.
The average rate on "conforming" 30-year home mortgages, or loans with balances of US$417,000 or less, fell to 3.67 per cent last week from 3.69 per cent, MBA said.
The average 30-year rate touched 3.60 per cent in the week ended July 8, which was the lowest since May 2013 and not far from the historic low of 3.47 per cent struck in December 2012, according to MBA data.
The benchmark 10-year Treasury yield fell to a record low of 1.321 per cent on July 6. It was 1.540 per cent on Wednesday, up slightly from late on Tuesday, according to Reuters data.