Home loan demand falls despite rate plunge

ADJUSTABLE SHARE SHRINKS

Borrowing costs on fixed-rate mortgages have moved significantly lower in recent weeks, while adjustable-rate mortgages have been fairly steady.

The gap between some fixed- and floating-rate loan rates is slim. Fixed 15-year mortgage rates averaged 5.81 percent, down from 6.04 percent. Rates on one-year adjustable-rate mortgages (ARMs) decreased to 5.90 percent from 5.95 percent.

The ARM share of activity decreased to 26.4 percent of total applications from 27 percent the previous week.

The MBA's survey covers about 50 percent of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.