U.S. mortgage applications fell for the first time in four weeks, reflecting a dramatic drop in demand for home refinancing loans, data from an industry group showed today. The Mortgage Bankers Association’s (MBA) Market Composite Index for the week ending January 22, 2010 decreased 10.9 percent on a seasonally adjusted basis from one week earlier and, on an unadjusted basis, decreased 10.1 percent compared with the previous week and decreased 19.8 percent compared with the same week one year earlier. The Refinance Index decreased 15.1 percent from the previous week and the seasonally adjusted Purchase Index decreased 3.3 percent from one week earlier. The unadjusted Purchase Index increased 2.8 percent compared with the previous week and was 4.5 percent lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is up 2.6 percent. The four week moving average is up 1.3 percent for the seasonally adjusted Purchase Index, while this average is up 2.8 percent for the Refinance Index. The refinance share of mortgage activity decreased to 67.6 percent of total applications from 71.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.7 percent from 4.1 percent of total applications from the previous week. “Refinance activity fell substantially last week,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Although rates remain low, there appears to be a smaller pool of borrowers who are willing and able to refinance at today’s rates.”