Home loan demand falls / mortgage rates drop

Consumers filed fewer loan applications to purchase homes last week despite a drop in long-term interest rates. The Mortgage Bankers Association’s seasonally adjusted purchase mortgage index -- considered a timely gauge on U.S. home sales -- decreased 1.9 percent to 400.8 for the week ended Feb. 24 from the previous week’s 408.7.

The index was also well below its year-ago level of 440.0.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.18 percent, down 0.04 percentage point from the previous week.

The 30-year fixed-rate mortgage, the industry benchmark, is substantially above its 2005 low of 5.47 percent in late June, but below its 2005 high of 6.33 percent reached in the week of Nov. 11.