US Mortgage Applications Sink to Year Low

U.S. mortgage applications sank last week to the lowest level since the end of last year despite falling borrowing costs, an industry trade group said Thursday.

The Mortgage Bankers Association's mortgage application index fell 7.6 percent last week.

The Mortgage Bankers Association's seasonally adjusted mortgage application index fell 7.6 percent in the week ending Dec. 21 to 603.8, its lowest reading since falling to 575.6 in the Dec. 29, 2006 week.

The MBA's weekly indexes have been exaggerated on the high side much of the year. Borrowers facing stricter loan standards often apply numerous times in search of getting one request approved.

The applications slump this week and last, however, appears to more closely reflect the status of ailing housing sales.

"Maybe late in 2008 we'll see some markets beginning to recover," said Gregory Miller, chief economist at SunTrust Banks in Atlanta, on Wednesday prior to the MBA report.

"But for the nation as a whole, I think the end of 2008 is probably as optimistic as one would want to get," he said. "More likely, we'll be well into 2009 before we start describing this housing cycle as 'in recovery"'.

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