(Bloomberg) — A gauge of US applications for home purchases dropped for a fifth week, approaching the lowest level since 1995 as mortgage rates held above 7%.
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The Mortgage Bankers Association’s index of mortgage applications for home purchases dropped 4.5% in the week ended Feb. 23. At 127.6, the gauge is the weakest since October when it slid to levels not seen in nearly three decades, suggesting momentum in the housing market is fading.
The contract rate on a 30-year fixed mortgage eased 2 basis points to 7.04%, hovering near the highest since early December.
Mortgage rates started the year below 7%, boosting sales of new and existing homes in January. But Federal Reserve officials — cognizant of strong economic growth, a healthy job market and somewhat-sticky inflation — have said they’re in no rush to lower interest rates, which has pushed home-financing costs higher in recent weeks.
Read More: Fed’s Rate Cut Path Likely to Be Slow, But Maybe Not So Steady
The MBA’s overall index for mortgage applications, which tracks both home purchases and refinancing, declined 5.6% last week to a three-month low. The measure for refinancing dropped 7.3%.
The MBA survey uses responses from mortgage bankers, commercial banks and thrifts and has been conducted weekly since 1990. The data cover more than 75% of all retail residential mortgage applications in the US.
(Adds graphic. A previous version corrected rate on 30-year mortgage)
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