(Reuters) - U.S. mortgage applications fell for a second straight week, with a slump in demand for government loans driving activity to its lowest level in three months, data from an industry group showed on Wednesday.
Demand for home loan refinancing and purchase loans, a tentative early indicator of home sales, both slid, indicative of a housing market that remains highly vulnerable to setbacks just weeks away from the expiration of federal home buyer tax credits.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended April 9, decreased 9.6 percent, reaching its lowest level since the week ended January 1.
The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 6.2 percent.
"Applications for government mortgages dropped substantially last week, following the implementation of an increase in FHA mortgage insurance premiums," Mike Fratantoni, the MBA's vice president of research and economics.
The MBA's seasonally adjusted purchase index decreased 10.5 percent. The decline in purchase applications was driven by government purchase applications, which decreased 19.1 percent from last week, compared to a decrease of 2.0 percent in conventional purchase applications.
The seasonally adjusted index of refinancing applications decreased 9.0 percent, continuing a recent trend brought on by a spike in mortgage rates.
Patrick Lashinsky, president and CEO of real estate brokerage ZipRealty, based in Emeryville, California, said sales activity is not as strong as late last year when first-time home buyers came out in droves to take advantage of a tax credit, which was originally set to end November 30.
"The extension and expansion of tax credits has not made a significant impact this time around," he said. link
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