Mortgage Applications Drop 5.3% Even as the 30-Year Rate Falls to 7.41%

Mortgage applications fell 5.3 percent in the week ending October 16, and the story inside the number is the uncomfortable one for the housing market: the 30-year fixed rate finally dropped for the first time in two months, to 7.41 percent, and demand still went nowhere. Purchase applications slid 7 percent on the week and ran 18 percent below the same week a year ago, according to the Mortgage Bankers Association's weekly survey released Wednesday.

Key Takeaways Total mortgage application volume fell 5.3 percent in the week ending October 16, the third straight weekly decline. The 30-year fixed rate dropped to 7.41 percent from 7.50 percent, the first decline in more than two months, and it…