Loan demand for purchase and refinancing applications dropped last week, as credit remains tight. Overall mortgage applications fell by 7.3 percent for the week ending May 10, the Mortgage Bankers Association reports in its weekly mortgage market index. 

Applications for refinancings dropped 8 percent during the week, while the purchase index -- viewed as a leading indicator of future home sales -- fell 4 percent, the MBA reports.

“Low interest rates have attracted new buyers and persuaded many home owners to refinance their mortgages,” The Wall Street Journal reports. “However, tightened credit restrictions still bar many borrowers from filing loan applications.”

The MBA reports that the average 30-year fixed-rate mortgage last week rose to 3.67 percent from 3.59 percent the prior week. Also, 15-year fixed-rate mortgages averaged 2.88 percent, rising from a 2.81 percent average the previous week. 

Source: The Wall Street Journal