Mortgage applications down as rates continue increase

Mortgage applications decreased for the third straight week as interest rates continued their month-long climb. 

Applications dropped 6.7 percent for the week that ended April 8 from a week earlier, refinancing was down 7.7 percent, hitting its lowest level since Feb. 11, and the purchase index decreased 4.7 percent, according to a Wednesday report from the Mortgage Bankers Association.

The four-week moving average, which is less volatile than the weekly reading, is down 3.3 percent, while the purchase index dropped slightly by 0.7 percent. Refinancing applications are down 5.3 percent.

Rates on 30-year fixed-rate mortgages averaged 4.98 percent, up from 4.93 percent, while the average for 15-year fixed-rate mortgages increased to 4.17 percent from 4.14 percent.

The share of applications filed to refinance an existing mortgage fell to 60.3 percent of total applications from 61.2 percent the previous week, the lowest level since May 7, 2010. 

The housing market is still struggling to shake out remaining foreclosures, with prices expected to bottom out this spring as the sector heads into its busy season. Although contracts for foreclosed and existing homes have been increasing, sales of new homes hit a record low in February as prices dropped to their lowest level in seven years.