The Mortgage Bankers Association said Wednesday that its index of applications to buy a home or refinance a loan fell 3.6% last week, from 631.6 to 609 from the week prior.
The group noted that purchase applications fell a whopping 5%, the largest drop since mid-January, while refinancing fell 1.4%.
The soft market is due to a variety of issues, including falling home prices, the subprime woes, harsher underwriting guidelines, credit issues, and high borrowing costs.
The mortgage bankers’ purchase index dipped to 424.2 last week from 446.5 the previous week, while the refinancing index dropped to 1,692.9 from 1,717.4.
The split of applications for refinancing as opposed to home purchase rose from 37.7% to 38.5%.
In related news, Countrywide, the nation’s largest mortgage lender cut its profit forecast amid a softer than expected market.
Analysts believe housing and subsequently mortgage will improve in 2008, although the beginning of next year may be rocky as well.
Though with the way things are developing, we could be in for a longer than expected trough as problems in housing and mortgage continue to expose themselves.
