Purchase Applications for New Mortgages at 15-year Low

(Newsroom America) -- In another sign the U.S. real estate market continues to be sluggish, an industry group said Wednesday that applications for new mortgages hit a 15-year low last week.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity fell 2.4 percent in the week ended Aug.19. The index includes home purchase demand and refinances.

Buyers continue to worry about the sluggishness of the economy and unemployment remains stubbornly high, which is what likely led to the drop in applications, analysts said.

The MBA also said the seasonally adjusted gauge of loan requests for home purchases tumbled 5.7 percent to its lowest level since December 1996.

"Another week of volatile markets and rampant uncertainty regarding the economy kept prospective homebuyers on the sidelines, with purchase applications falling to a 15-year low," said Mike Fratantoni, MBA's vice president of research and economics, in a statement.

"This decline impacted borrowers across the board, with purchase applications for jumbo loans falling by more than 15 percent and purchase applications for the government housing programs falling by 8.2 percent," he said.

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