NEW YORK - Demand for U.S. home loans slipped last week even as mortgage rates hovered near record lows, the Mortgage Bankers Association said on Wednesday.
A rise in home purchase requests and a drop in refinancing applications, however, were distorted by revisions to the prior week's data, the industry group said.
Borrowing costs stayed low with average 30-year mortgage rates dipping 0.01 percentage point to 4.82 percent last week. The rate was near the 4.61 percent level set in March, the lowest since the MBA began tracking rates weekly in 1990.
Total applications declined 4.5 percent in the week ended Nov. 20, with applications to buy a home up 9.6 percent and requests for loans to refinance down 9.5 percent.
The MBA revised indexes for the week ended Nov. 13 after one survey participant changed data to show higher application volume and reclassified some loans from purchases to refinances. That slightly lowered the purchase index and slightly increased the refinance index in that week.
The latest batch of October home sales figures and September house price readings have been a mixed bag but point to stabilization.
Average home prices rose in September for the fifth straight month but the pace of appreciation slowed.
Sales of existing homes shot up by about 10 percent in October as buyers rushed to take advantage of the first-time buyer tax credit that had been slated to expire on Nov. 30. The deadline has since been extended to cover sales contract signed by April 30, with loan closings required by June 30.
Housing may be stabilizing but is far from staging much of a recovery, economists agree.
Consumers are gun-shy at this point, said Cameron Findlay, chief economist at LendingTree.com in Charlotte, North Carolina.
Average home prices will slide as much as 7 percent by June 2010, bringing the total drop from their 2006 peak to 32 percent, he said.
Unemployment that is at the highest rate in 26-1/2 years is keeping many buyers at bay despite lower house prices and borrowing costs.
Still, Findlay is optimistic about the outlook a year from now. Home prices are declining at a lesser pace, which is a positive. (Editing by Leslie Adler) ((firstname.lastname@example.org; +1 646 223-6307; Reuters Messaging: email@example.com))