Mortgage applications hit 2008 low

The number of new mortgages applied for fell 14.1%, according to a weekly survey from the Mortgage Bankers Association.

July 30, 2008: 8:11 AM EDT

NEW YORK (AP) -- Mortgage application volume tumbled 14.1% during the week ending July 25, hitting its lowest level of the year, according to the Mortgage Bankers Association's weekly application survey.

Volume fell even though interest rates on fixed-rate mortgages retreated from sharp increases a week earlier.

Refinance volume plunged 22.9% during the week, while purchase application volume fell 7.8%. Refinance applications accounted for 35.2% of total application volume during the week.

The overall application index fell to 420.8 from 489.6 a week earlier.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked such data. The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50% of all residential retail mortgage originations each week.

The average rate for traditional, 30-year fixed-rate mortgages fell to 6.46% from 6.59% during the previous week. Rates for 15-year fixed-rate mortgages - often a popular option for refinancing a home - fell to 5.98% from 6.10%.

The average rate for one-year adjustable-rate mortgages rose to 7.25% from 7.16% a week earlier.