New York, NY - Applications of U.S. weekly home mortgages declined by 8.2 percent on seasonally adjusted basis last week from the prior week, as fewer numbers of homeowners decided to refinance, according to a report released on Wednesday.

"With all the talk the Fed is buying (MBS), rates could drop further and (borrowers) may say, 'Why not wait a little more' [before refinancing]", Orawin Velz, associate vice president of economic forecasting at the MBA, was quoted as saying by Reuters.

The Mortgage Bankers Association’s (MBA) index, a measure of mortgage loan application volume, for the week ended Jan. 2 dropped by 28.3 percent, compared to the same period a year earlier.

Last week, the weekly survey report showed that its composite index of mortgage application activity dropped to 1143.8, from 1245.7 on a seasonally adjusted basis one week earlier.

For the four weeks, the moving average, which is a less volatile measure, for all mortgages showed an increase of 7.9 percent, mainly pushed up by greater interest in refinancing their mortgages.

While, MBA’s purchase index increased 7.3 percent to a seasonally adjusted 344.2. The four week moving average is up 3.6 percent for the purchase index.

The refinance index decreased 12.3 percent to 5904.5 from 6733.8 the previous week, while the four week average is up 9.3 percent for the refinance measure.

The market analysts on Wall Street are speculating that the new administration is likely to depend on lower federal mortgage rates to stabilize the housing market, which has suffered in the worst recession since the Great Depression.

The Washington-based Mortgage Bankers Association’s survey constitutes around half of all U.S. retail residential mortgage applications, recording actions taken by the homebuyers on mortgages in the on-going slumping housing market condition and low house prices.

The index for refinancing application activity comprised around 79.8 percent of total mortgage home applications submitted last week, compared to 82.9 percent refinancing applications filed the prior week. Adjustable-rate mortgage applications increased to 0.9 percent last week, compared to 0.8 percent.

The MBA said Wednesday that applications for 15-year fixed mortgages dropped to 4.67 percent on average basis for the week ended Jan. 2 from 4.79 percent the previous week. The application activity for a one-year adjustable mortgage also decreased to 5.90 percent on average rate basis from 6.15 percent one week earlier.

Meanwhile, the application activity for fixed 30-year mortgages climbed to 5.07 percent in the last week, compared to 5.03 percent the prior week, which is the lowest reading in more than four weeks.