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Home-buying loan applications at 13-year low

By Hibah Yousuf, staff reporter

NEW YORK (CNNMoney.com) -- Mortgage applications to buy a home plunged last week - to the lowest level in more than 13 years - as the housing recovery continued to struggle following the expiration of the homebuyer tax credit, an industry group said Wednesday.

The Mortgage Bankers Association said application for mortgages to purchase a home sank a seasonally adjusted 3.1% for the week ended July 9 on a week-over-week basis, driving the volume to its lowest level since December 1996. On an annual basis, applications for the week were down 43%.

Much of the slowdown has come since the April 30 expiration of homebuyer tax credit. Homebuyers had until that deadline to sign contracts. Congress extended the deadline to close deals to Sept. 30.

The government's latest reading on new home sales plummeted to a record low in May, thanks largely to the expiration of the tax credit.

The MBA's reading on refinancing applications and its overall mortgage application index also declined, each sliding a seasonally-adjusted 2.9%. The week's adjustments include the Independence Day holiday.

The slump in activity also came as rates on the widely used 30-year fixed mortgage ticked up to 4.69% from 4.68%, according to the MBA. The rate for a 15-year fixed-rate mortgage also rose to 4.12% from 4.11%.

Rates for one-year adjustable rate mortgages, or ARMs, held steady at 7.20%.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.88%3.83%
15 yr fixed2.84%2.96%
5/1 ARM3.24%3.09%
30 yr refi3.92%3.94%
15 yr refi2.94%3.05%
Rate data provided
by Bankrate.com
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