After managing a bounce from levels not seen in decades, mortgage applications continued their downward spiral. In the latest update from the Mortgage Bankers Association, for the week ended March 7, applications for home loans fell 2.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 1 percent.
There has been a steady slide in mortgage applications over the past nine months as the housing market returns to a more sustainable pace. As the chart above shows, applications are near their worst level in years. The Refinance Index also fell 3 percent from the previous week, while the Purchase Index declined 1 percent. On an unadjusted basis, the Purchase Index was 17 percent below year-ago levels.
Overall, the refinance share of mortgage activity accounted for 57 percent of total applications, the lowest shares since April 2011 and down from 58 percent a week earlier. Furthermore, interest rates rose in the latest report, which will likely hinder any momentum in refinance activity.