Bloomberg News

WASHINGTON - The Mortgage Bankers Association index of applications for mortgages declined 6.5% in the week that ended July 7 to the lowest level since February.

The new figure, 300.2, was the lowest since 288.4 in the week that ended Feb. 25.

The MBA's purchase index, which measures housing demand, also fell, by 4.7%, to 303.

"The momentum in housing is definitely past its peak," said Steve Wood, an economist at Bank of America Securities in San Francisco.

Still, "the level of housing sales and starts is still quite high,'' he said.

The average contract rate on a 30-year fixed-rate mortgage fell 0.11 percentage points, to 8.14%, the lowest since 8.11% in the week that ended April 14.

The average one-year adjustable rate rose 0.11 percentage points, to 7.66%.

Existing home sales, which account for 85% of all houses on the market, rose to an annual rate of 5.09 million in May, close to last year's record sales of 5.2 million.

The MBA's refinancing index fell 16%, to 284.3 - the lowest level since April 1997.

These indexes are adjusted to correct for seasonal changes and holidays.

The mortgage bankers' survey measures activity against a base period set in the week that ended March 16, 1990, which was assigned an index value of 100.

The survey covers about 40% of the U.S. residential mortgage market.

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