The latest interest rate trends and mortgage-application statistics point to layoffs this year at mortgage banks, David Lereah, an economist at the Mortgage Bankers Association, said Wednesday.

Mr. Lereah predicted a decline in sales of new and existing homes by March or April and "modest" reductions in staff at mortgage banking companies by late summer. He was quick to add that the layoffs would be "nothing like 1994," when the end of the last refinancing boom decimated lenders' ranks.

Mortgage applications fell 6% in the week ended Friday, the MBA reported. But the average rate for 30-year, fixed-rate mortgages fell to 6.97%, from 7.09% the previous week, reassuring mortgage bankers that refinancings could go on a while longer.

Refinancing activity comprised 41.4% of total applications in the MBA's latest survey, down from 41.9%.

"The refi boom is slowing, but there is still a substantial percentage of volume in refi," said A. William Schenck 3d, chairman and chief executive officer of Fleet Mortgage Group, Columbia, S.C. "As long as rates stay in the 7.25%-or-lower range, we're going to have a higher-than-normal refinance rate."

Mr. Schenck said his company's pipeline of pending loans is down 25% from its peak, but still twice as big as it was at the end of 1997. - Marc Hochstein

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