US mortgage applications drop 0.8% week-on-week

US mortgage applications fell 0.8% in the week ended 25 November, according to the Mortgage Bankers Association, following a 2.2% advance in the previous week.

Applications to refinance a home loan dropped 12.9% and the purchase index rose 3.8%, while the 30-year mortgage rate went down by 18 basis points to 6.49% - the lowest reading since mid-September.

"The economy here and abroad is weakening, which should lead to slower inflation and allow the Fed to slow the pace of rate hikes. Purchase activity increased slightly after adjusting for the Thanksgiving holiday, but the decline in rates was still not enough to bring back refinance activity," said MBA economist Joel Kan.

Reporting by Iain Gilbert at Sharecast.com