Mortgage application and interest rates drop

Mortgage applications drop 2.6% after rising 4.1% the previous week despite continued low-interest rates. Refinance activity also dropped 1.6 percent, according to the MBA’s weekly survey, which covers more than three-quarters of all United States retail residential mortgage applications.

Europe’s economy continues to tumble pushing interest rates to the lowest they have been this year. “Remarkably low rates are not enough, as many homeowners continue to hold back due to lack of equity in their properties, poor credit and a weak job market,” MBA vice president Michael Fratantoni said.

Unemployment rates and strict loan requirements are making it difficult for banks to convince the public to spend their money. With interest rates at record lows and foreclosure savings rates above 50% in some states, the U.S. consumers view of a wavering economy is clear.

Mortgage Applications Drop 2.6%

Each average rate reached a new low for 2011

Mortgage Product Avg. Interest Rate (current) Avg. Interest Rate (previous)
30-year fixed-rate 4.08% 4.12%
15-year fixed-rate 3.39% 3.44%
30-year FHA 3.93% 3.94%
30-year jumbo 4.44% 4.47%
5/1 ARM 2.90% 2.93%