(Reuters) - Applications for home mortgages fell last week as demand for refinancing eased slightly but purchase applications rose to their highest levels since June, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 1.2 percent in the week ended on October 5, 2012.
The MBA’s seasonally adjusted index of refinancing applications fell 2 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 2.4 percent. Despite the decline of refinance applications, their volume is still near three-year highs, Mike Fratantoni, MBA’s vice president of research and economics, said in a statement.
Fixed 30-year mortgage rates averaged 3.56 percent in the week, up 3 basis points from 3.53 percent the week before. Still, they remained near their lowest levels in the wake of the Federal Reserve’s latest aggressive program to boost the economy.
In a program known as quantitative easing, or QE3, the Fed said in September that it will buy $40 billion in mortgage-backed securities a month until the job market improves.
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.
Reporting By Atossa Araxia Abrahamian; Editing by Diane Craft