Confounding many analysts, mortgage records show application volume fell once again last week, the Mortgage Bankers Association reports, despite home loan rates at their lowest levels ever.
According to the MBA's Weekly Mortgage Applications Survey, total mortgage volume dipped 2.6 percent during the week ending December 16, led by a near-5-percent drop in the Purchase Index. Additionally, the Refinance Index declined 1.6 percent on a weekly basis.
"Continued anxiety surrounding the fragile economic situation in Europe led interest rates lower last week," said MBA's vice president of research and economics, Michael Fratantoni. "However, refinance applications fell slightly, and purchase applications dropped further as we head into the end of the year."
He continued that historic lows for mortgage rates don't appear to be enough to entice many buyers who are sitting on the sidelines as 2011 winds down.
Economic and housing forecasts from both Freddie Mac and Fannie Mae point to slow economic growth in 2012, though both government-sponsored enterprises stated mortgage rates should remain near record lows through the first half of the year.