Merck CEO speaks soothingly of future drug approval

TRENTON, N.J. (AP) — Merck & Co.’s CEO said Thursday that setbacks in drug development and other problems made his just-ended first year a tough debut.

But Kenneth Frazier expects better news in 2012 for the maker of diabetes blockbuster Januvia and Singulair for asthma and allergies.

Speaking to analysts at the Goldman Sachs’ Healthcare CEO’s Unscripted conference in New York, he said some important new drugs are on the horizon and Merck is pursuing deals for others that are in late testing. Until now, the Whitehouse Station, N.J., company has mainly pursued acquisitions of experimental drugs that are early in testing, when the deals are cheaper and there’s less chance of getting into a bidding war.

“Last year, it couldn’t possibly have started worse than it did,” Frazier said.

Nothing to see here.

Grains and fertilizer supplier Bunge Ltd. (BG) completed construction of a grain terminal near Ukraine’s Black Sea coast with the capacity to handle 4 million metric tons a year, Interfax-Ukraine reported.

The project by White Plains, New York-based Bunge, in the city of Mykolaiv in the south of the country, cost about $100 million, Interfax reported, citing Alina Maksymova, the port’s press secretary.

The terminal can store 140,000 tons of grain at any one time, according to the Kiev-based newswire.

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After months of pushback from Republicans in Congress, President Obama has finally decided to go over their heads and appoint former Ohio Attorney General Richard Cordray head of the Consumer Financial Protection Bureau without them.

So who is he?

We’ve written a lot about him at Business Insider. Partly because, no matter what side of the aisle you’re on, there’s no denying he’s incredibly impressive. Cordray is an undefeated, five-time Jeopardy! champion (he won $45,303), has a masters in economics from Oxford University, and was also editor-in-chief of the University of Chicago Law Review.

After law school he clerked for Supreme Court for a Reagan appointee, and represented the U.S. government before the Supreme Court there three times — once for George H.W. Bush and twice for Bill Clinton. That was all before running for AG of Ohio (a swing state) as a Democrat.

So what’s the problem with Cordray? There are two, one is an old Washington problem, and the other is purely Wall Street’s:

1.Republicans said they would never support anyone to head the CFPB — Period —that is, unless the White House made serious changes to the agency. (Politico)

2.He doesn’t just go after Wall Street Institutions. He goes after individual executives as well.
Let’s expand on point 2 with some more examples of how Cordray fought Wall Street as Ohio AG:

•In 2009, representing several state public pension funds, he reached a settlement with Hank Greenberg and other AIG execs that blew the SECs settlement out of the water. Cordray got $115 million, the SEC got a mere $15 million.
•The following year he settled another suit against AIG itself (also for Ohio) for $750 million. Some reports said the insurance company would actually be paying out $1 billion.
•And then there was the Bank of America Merrill Lynch merger. Cordray sued on behalf of Ohio pensions on the grounds that BofAS concealed billions of dollars of Merrill Lynch losses from their clients before the merger. The case settled for $475 million.
When we talked to him about the Merrill/BofA case in 2009, he, of course, explained the why he was suing, but also revealed why he’s such a threat:

My understanding of a bonus is that it’s a special reward for superior performance. There wasn’t any superior performance for special reward; nonetheless, they (BofA and Merrill execs) wanted the bonuses. They ultimately, as best we know, got approval to pay out somewhere between $3 and $4 billion in bonuses, which was a very material element to the value of the merger. That was not disclosed to investors.

…we’ve also pursued some of the top executives — not just the corporations themselves. We do think that they bear their share of the blame — we think that they need to be held accountable as well. We think that that’s a principle that sends a message to other corporate executives on Wall Street that is a further disincentive for this kind of thing in the future.There’s your new sheriff, Wall Street. As we reported earlier today, it’s likely Republicans will fight Obama’s appointment in Court. In the meantime, Cordray will be able to nice and comfy at the CFPB.

WASHINGTON (AP) — 2012 looks to be another year of opportunity for the few who can afford to buy or refinance a home.

The average rate on the 30-year fixed mortgage fell to 3.91 percent this week, Freddie Mac said Thursday. That matches the record low reached two weeks ago.

The average on the 15-year fixed mortgage ticked down to 3.23 percent from 3.24 percent. That’s up from 3.21 percent two weeks, also a record low.

Mortgage rates are lower because they tend to track the yield on the 10-year Treasury note, which fell below 2 percent this week. They could fall even lower this year if the Fed launches another round of bond purchases, as some economists expect.

Still, cheap mortgage rates have done little too boost the depressed housing market. For eight straight weeks at the end of 2011, the average fixed mortgage rates hovered around 4 percent. Yet many Americans either can’t take advantage of the rates or have already done so.

High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.

Previously occupied homes are selling just slightly ahead of 2010’s dismal pace. New-home sales in 2011 will likely be the worst year on records going back half a century.

BUDAPEST, Hungary (AP) — Hungary’s woes deepened Wednesday as the government’s controversial economic policies and uncertainty over whether it can agree on a deal with the IMF drove its currency to a new low against the euro.

Hungary’s borrowing costs also rose to levels not seen since 2009, forcing the government to cancel a planned bond swap auction Wednesday.

Hungary’s economy has been staggering since 2008, when the global credit crunch prompted the Central European nation of 10 million to accept an International Monetary Fund bailout of euro20 billion ($26 billion). Over the past months, investors have shied away from buying Hungarian debt, and the country’s credit rating was cut to junk status by two U.S. ratings agencies late last year. Unemployment is 10.8 percent and the country could be heading toward a recession.

Hungary is seeking a financial “safety net” from the IMF and the European Union, but preliminary talks ended early in December after the government pushed ahead with new laws seen as infringing on the independence of the National Bank of Hungary. Talks with the IMF are due to restart next week in Washington.

On Wednesday, the euro rose to a record 321.40 forints, surpassing a peak above 317 reached only two months ago, while interest rates for Hungary’s 10-year bonds was 10.6 percent, compared with 8.4 percent in early December.

“With problems likely to deepen in the eurozone and no sign that Hungary’s policy credibility is improving, Hungarian assets look set to be in for a bumpy ride,” said William Jackson, an emerging markets economist at Capital Economics in London.

NEW YORK (AP) — U.S. chemical companies that use natural gas as a feedstock have an advantage over European rivals that rely on more expensive crude, a Citi analyst said Wednesday.

Analyst P.J. Juvekar noted that with natural gas prices expected to average around $3.85 per 1,000 cubic feet this year, it will still be a cheaper feedstock than crude oil.

Juvekar also upgraded chemical maker Cytec Industries Inc. and nitrogen producer CF Industries Holdings Inc. to “Buy” from “Neutral” for individual reasons. Juvekar also downgraded phosphates and potash producer Mosaic Co. to “Neutral” from “Buy.”

Cytec was upgraded because of its ability to make carbon fiber, which is becoming a bigger component of new aircraft models like the Boeing 787. Juvekar also favored CF Industries over Mosaic, noting that makers of nitrogen-based fertilizers will fare better than others as fertilizer demand falls after the North American harvest. Juvekar noted that farmers must apply nitrogen-based fertilizers every year, while they can skip applying other fertilizers made from phosphates or potash.

In morning trading, CF Industries shares rose by $3.20, or 2 percent, to $157.01 while Cytec Industries shares added $1.07, or 2.4 percent, to $47.02. Mosaic shares fell by $1.19, or 2.3 percent, to $51.40.

WICHITA, Kan. (AP) — The Boeing Co. has told its employees that it plans to close its massive defense plant in Wichita by the end of 2013 in a bid to cut costs in a tight market for defense spending.

Wednesday’s announcement means the loss of 2,100 well-paying jobs at its Kansas facility, which was once considered the centerpiece of Wichita’s claim as the air capital of the world.

It also dashes hopes for an additional 7,500 direct and indirect jobs that the company once promised to bring to Wichita with the Air Force air refueling tanker contract.

The work will move to Boeing facilities in Texas, Oklahoma and Washington.

(Reuters) – MF Global unloaded hundreds of millions of dollars’ worth of securities to Goldman Sachs in the days leading up to its collapse, according to two former MF Global employees with direct knowledge of the transactions. But it did not immediately receive payment from its clearing firm and lender, JPMorgan Chase & Co (NYSE:JPM – News), one of the sources said.

The sale of securities to Goldman occurred on October 27, just days before MF Global Holdings Ltd (Other OTC:MFGLQ.PK – News) filed for bankruptcy on October 31, the ex-employees said. One of the employees said the transaction was cleared with JPMorgan Chase.

At the same time MF Global, which was run by former Goldman Sachs head Jon Corzine, was selling securities to Goldman to raise badly needed cash, the futures firm was also drawing down a $1.2 billion revolving line of credit it had with JPMorgan, according to one of the former MF Global employees.

JPMorgan spokeswoman Mary Sedarat said the bank did not withold money because of the line of credit. She declined further comment on details of the transactions.

DES MOINES, Iowa (AP) — With several attention-grabbing protests before Iowa’s caucuses, Occupy Wall Street activists proved their movement did not end when its encampments in big cities dispersed. But they also showed the group hasn’t matured into a political force, and it’s not clear whether it will become a liberal counterweight to the tea party this election year.

Following Tuesday’s vote in Iowa, on which the movement had little impact, Occupy organizers are pledging to stage more protests in New Hampshire and South Carolina as the presidential nomination process moves east. But the smaller-than-expected crowds, a muddled message that was mostly ignored by candidates, and tactics that seem to limit their appeal raised questions about its long-term viability.

“This is a sign that the way they have been trying to do it probably isn’t going to work,” said Dave Petersen, director of the Harkin Institute of Public Policy at Iowa State University, who said Occupy’s only discernible impact was tighter-than-usual security at Republican events. He said the group needed to develop leaders and a more coherent message if it wanted to make the transition from a grassroots movement to an electoral powerhouse.

Occupy protesters credited their Iowa counterparts with keeping the movement going even as they questioned tactics such as heckling candidates and blocking campaign offices.

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Bill Gross is backing away from Pacific Investment Management Co.’s outlook for a “new normal” after lagging behind the majority of his peers during the biggest bond-market rally in nine years.

The period of muted growth in developed economies, high unemployment and “relatively orderly delevering” that Mohamed El-Erian, who shares the title of chief investment officer with Gross, coined in the aftermath of the 2008 financial crisis appears to be morphing into a world of credit and zero-bound interest-rate risk, said Gross, the founder of Pimco and manager of the world’s biggest bond fund.

“It’s as if the earth now has two moons instead of one and both are growing in size like a cancerous tumor that may threaten the financial tides, oceans and economic life as we have known it for the past half century,” Gross wrote in a monthly investment outlook posted on the Newport Beach, California-based company’s website today. “Welcome to 2012.”

Most developed economies have not, in fact, de-levered since 2008 and credit remains resilient because of the multitude of monetary stimulus packages being made available through central banks in the U.S. and Europe, Gross wrote. This risks leading to unraveling of financial markets if policy makers are unable to foster growth and inflation accelerates, he said.

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FUELING ANGER: One man was killed at a demonstration protesting spiraling fuel prices in Nigeria amid signs of growing unrest over the government’s hugely unpopular decision to end a subsidy program that kept gas costs down for more than 20 years. The government says it will use $8 billion in savings to make much-needed infrastructure improvements.

PUMPED UP PRICES: Gas pump prices have more than doubled, to about $3.50 a gallon. In Nigeria gasoline is used not only to fuel cars, but to run generators that keep many businesses operating in a country with frequent power blackouts.

LOTS OF OIL, LOTS OF IMPORTS: Nigeria, an OPEC member nation producing about 2.4 million barrels of crude oil a day, is a top supplier to the U.S. virtually all of its petroleum products are imported after years of graft, mismanagement and violence at its refineries.

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KANSAS CITY, Mo. (AP) — Tougher sentencing laws and reduced prisoner programming budgets have Kansas officials discussing ways to balance the need to protect the public against efforts to reduce the state’s burgeoning prison population, Kansas Corrections Secretary Ray Roberts said.

A recent count found Kansas men’s prisons are housing 8,635 inmates, 266 over capacity. The state’s prisons are projected to be short about 2,000 beds in a decade, according to the Kansas Sentencing Commission. Prisons for women also will exceed capacity in about seven years, the commission said.

The solutions being considered would keep the public safe while releasing some prisoners sooner than planned or keeping them out of prison in the first place, Roberts told The Kansas City Star (http://bit.ly/tvMi9l ). So far, Kansas is not considering mass releases of prisoners.

Roberts has a mix of three broad options in mind: build more prisons, house prisoners in county jails or cut recidivism by helping paroled prisoners. Each idea would cost millions of dollars, he said.

Wyandotte County District Attorney Jerome Gorman said police and prosecutors won’t let up in efforts to bring prisoners to trial.

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MIXED EMPLOYMENT REPORT: Germany’s unemployment rate edged higher in December, but the average number of people unemployed last year in Europe’s biggest economy was the lowest for two decades.

THE MONTHLY DETAILS: The government said Tuesday that the unadjusted jobless rate rose to 6.6 percent last month from 6.4 percent in November. But the seasonally adjusted jobless rate dipped to 6.8 percent from 6.9 percent a month earlier.

THE ANNUAL RESULTS: The number of people out of work averaged 2.976 million for the full year, 263,000 fewer than in 2010 and the lowest overall figure since 1991. Last year’s average jobless rate was 7.1 percent, down from 7.7 percent in 2010. Andreas Rees, an economist at UniCredit in Munich, said the German labor market still has “substantial” momentum.

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ROME (AP) — A government-mandated report has confirmed what many Italians long suspected: The euro11,000 ($14,300) that Italian lawmakers earn each month far outpaces what their peers in some of Europe’s largest economies get.

Italy’s bloated public sector and the privileges of its political elite have come under fire as the country battles its debt crisis with tax hikes, labor market and pension reforms that are hurting ordinary Italians.

Premier Mario Monti has vowed to trim the cost of governing as part of his austerity measures, and has renounced his own salary as premier and economy minister.

The report, published Tuesday, looked at comparisons between labor costs for lawmakers in Italy compared to France, Germany, Spain, the Netherlands, Belgium and Austria. It also considered 34 public agencies in Italy to see if there were analogous ones in the other countries. The commission’s president hopes the findings will provide “food for thought.”

This piece from the Times follows a report from Moody’s on the 22nd of December.

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American consumers are running out of tricks.

As the weak economy has trudged on, they have leaned on credit cards to pay for holiday gifts, many bought at discounts. They are dipping into savings to cover spikes in gas, food and rent. They are substituting domestic vacations for international trips, squeezing more life out of their washing machines and refrigerators and switching to alternatives as meat prices have risen.

That leaves little room for a big increase in spending in 2012, economists say, a shaky foundation for the most important pillar of the American economy.

“The consumer is far from healthy,” said Steve Blitz, senior economist for ITG Investment Research.

Even the seemingly robust holiday shopping season is raising concern. After a strong start on Thanksgiving weekend, a pronounced lull followed, causing retailers to mark down products heavily in the week before Christmas. While final numbers for the season are not in, analysts say they are worried that retailers had to eat into profits to generate high revenues.

Consumer spending makes up 70 percent of the economy, so until it ignites, general growth is likely to be sluggish.

Macroeconomic Advisers, a forecasting company, projects growth of around 2 percent for the first half of this year, down from an estimate of 3.6 percent in the fourth quarter of 2011 and just 1.8 percent in the third quarter.

For consumers, the reasons for the sluggishness are clear: incomes are essentially flat, job growth is modest, and more than 40 percent of the new jobs in the last two years have been in low-paying sectors like retail and hospitality.

While consumer spending is not “going to collapse,” said Joel Prakken, senior managing director at Macroeconomic Advisers, “there are some headwinds there.”

WASHINGTON (AP) — Construction spending in the U.S. jumped in November as builders spent more on single-family homes, apartments and remodeling projects.

The Commerce Department said Tuesday that spending on construction projects rose 1.2 percent in November, following a revised 0.2 percent drop in October. The increase was the third in four months and the largest since a 2.2 percent rise in August.

The November increase pushed spending to a seasonally adjusted annual rate of $807.1 billion, still barely half the $1.5 trillion that economists consider healthy. Analysts say it could be four years before construction returns to health levels.

Home construction has begun a gradual rebound and likely added to the nation’s economic growth in 2011. The chief reason is apartments are being built almost twice as fast as two years ago. Renting is the only option for many people who have lost their jobs, their homes or both.

For November, private residential construction increased 2 percent in November to a seasonally adjusted $522.3 billion. It was the fifth consecutive gain.

Single-family construction rose 1.5 percent while multi-family construction including apartments rose 1.3 percent. The category that covers home remodeling rose 9.5 percent.

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The stock market rose sharply on Tuesday in part on the strength of a solid government report on new housing starts and permits. Housing starts in November checked in at an annual rate of 685,000, up 9.3 percent from October 2011, and up 24.3 percent from October 2010.

This would seem to be a strange time for a housing construction boom. As blogger Barry Ritholtz Tweeted: ” Yeah, more inventory! Just what we need!” Indeed, a sharply higher amount of unsold homes would seem to fall near the bottom of the long list of things the U.S. economy needs. Existing home sales, while up this year, are way below their recent peaks. And so at the end of October, there were “3.33 million existing homes available for sale, which represents an 8.0-month supply at the current sales pace,” according to the National Association of Realtors. That figure probably estimates the impending supply given the number of homes that are in foreclosure and likely to be puked onto the market by banks. Meanwhile, new home sales are running at a low pace — an annualized rate of 307,000 — which means it would take 6.3 months to clear the 162,000 new homes from the market. A four-month supply of new and existing homes would be much more healthy.

So why are housing starts rising? A look inside the data reveals the answer. Builders have learned their lesson. They aren’t foolishly building amenity-rich McMansions and Tudors with four-car garages to sell to highly indebted aspirational consumers. Rather, they’re building smaller, practical abodes that they plan to rent out. Indeed, recent housing data help flesh out a post-crisis cultural, societal and financial shift toward housing: less owning and more renting. Thanks to foreclosures, walking away and a general inability to get financing, the homeownership rate has fallen in the U.S. from 69 percent in the third quarter of 2006 to 66.3 percent in the third quarter of 2011. That translates into several million households that used to own homes that are now renting.

Builders have reacted to this shift. They’re building fewer family homes and more multifamily buildings. Look at the data. Yes, in November, the headline housing starts number was up sharply from October 2011, and from November 2010. (See Table 3 in the above document) But single-family starts haven’t done much: They were up only 2.3 percent from October 2011, and down 1.5 percent from November 2010. But the market for structures with five units or more is going gangbusters. In November 2011, starts in this sector came in at an annual rate of 230,000, up 32 percent from 174,000 in October 2011, and up an eye-popping 180 percent from November 2010. Through the first 11 months of the year, single family housing starts are off about 10 percent from the first 11 months of 2010. By contrast, starts of structures with five or more units were up 60 percent in the same time period, from 97,700 to 156,200. The sharp rise in apartment construction is more than compensating for the continuing decline in house construction. The data on permits (Table 1) tells a similar story. Through first 11 months of 2011, permits for free-standing houses are off 7.7 percent from the first 11 months of 2010, while permits for 5+ unit structures are up 36.4 percent.

Rather than indicating optimism about the housing sales market, the data on housing starts and permits point to optimism about the apartment rental market. Builders, and the lenders who enable them, are looking ahead and concluding that it makes more sense to build multifamily units, which tend to be more efficient, smaller and less expensive than single-family homes. In addition, this type of housing offers developers far more flexibility. Depending on market conditions, they may decide to sell the units as condos, or rent them out. In recent years, as in the single-home market, the bias has shifted away from ownership. Check out the Census Bureau data that breaks down completed housing by purpose and design. (See Table Q6) In 2007, only 62 percent of the housing units in buildings with two or more units were built for rent; the percentage rose to 84 percent in 2009 and 87 percent in 2010. In the first three quarters of 2011, 90 percent of such units completed were built for rent.

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Members of an armed gang are on trial after they’ve been charged with stealing millions from the Dubai royal family. The £2million heist ($3,099,000) was the royal family’s “holiday spending money” set aside for its visit to London on June 24.

Royal aide Abdullah Shakeri, who testified from behind a protective screen, said he thought members of the gang were only joking when they first approached him outside the Emirates Bank in Knightsbridge, West London with the demand to “put the cases down or I’ll shoot you in the face.” The Daily Mail reports that the robbers then repeated their threat and told Shakeri he would be shot if he did not flee the scene.

Prosecutor Alexandra Felix said the money was divided into £50 notes, held in two suitcases. “The royal family were in the UK and required money for their stay here,” Felix said. “Mr Shakeri had made arrangements to collect the money. He and the manager went into a room to count the money. The cash was in £50 note bundles which was placed in suitcases.”

Shakeri described the man who held him at gunpoint as a young Middle Eastern man with short dark gelled hair and a leather jacket. “He had a gun. I think it was a black automatic handgun. He pointed it at me,” Shakeri said. The man then shouted for an accomplice, whom Shakeri described as a black man wearing a white hard hat and a “high visibility jacket.” The accomplice reportedly told Shakeri and the other royal family staff to run into a nearby shop. “We did as we were asked so we went into a H&M just next to the bank,” Shakeri said.

After the robbers fled, the royal family staff radioed the diplomatic protection group, who pursued the suspects. A man fitting the description of the first suspect was spotted just 300 feet from the crime scene but escaped and has yet to be found.

An officer spotted the suspect throwing a metallic object under a car, which he thought was a gun but turned out to be two mobile phones.

However, police were able to apprehend getaway driver Johnathon Haynes, 36, along with the royal family’s stolen cash. They also found the hard hat, the high-visibility jacket and a passport for Trevor Mair, 46, inside the car.

When Haynes was handcuffed, he reportedly told the arresting officers, “Yes, OK, fair enough. Are you going to take me to the police station now because I’m a bit cold.”

In summary, output remains unchanged amidst constrained budgets of Middle Eastern countries, and Libya is coming back online fast.

VIENNA (Reuters) – OPEC oil producers on Wednesday sealed their first new output agreement in three years in a deal that settles a 6-month-old argument over supply policy firmly in Saudi Arabia’s favor.

The Organization of the Petroleum Exporting Countries agreed a target of 30 million barrels daily, ratifying current production near 3-year highs. It did not discuss individual national quotas.

The deal vindicates Saudi Arabia after its proposal to raise output in June to stem rising prices was rejected by price hawks led by Iran, Algeria and Venezuela.

“For the Saudis it’s a fantastic decision,” said Jamie Webster of Washington consultancy PFC Energy.

Saudi said it pumped 10 million barrels a day last month, 25 percent above its old OPEC quota, in what Gulf delegates said was a demonstration of strength to the price hawks ahead of the meeting.

In theory the agreement caps output for all 12 OPEC members for the first half of 2012 at levels that should permit a modest rebuilding of lean global inventories.

“We’re not going to bypass it, we’re going to adhere to it,” promised OPEC Secretary General Abdullah al-Badri of the new supply limit. “Saudi Arabia will abide by this decision for sure.”

That will depend on whether or not Saudi and its Gulf Arab allies decide to ease back supply as post-civil war Libya heads towards full production or keep the taps open to drive oil below $100 a barrel.

Saudi Arabia did not allay doubts about its intentions.

“If Libya increases it doesn’t necessarily mean Saudi will cut,” said Saudi Oil Minister Ali al-Naimi. “We don’t react to that, we react to market demand,” he said.

Oil analysts warned that without defined individual national quotas, leakage above the new limit was very possible.

“Someone has to cut back to accommodate Libya, that has to be done,” said analyst Lawrence Eagles of JP Morgan. “As always with OPEC the proof will be in the pudding. How closely will they stick to the new limit?”

“The whole organization has to be at 30 million so if someone goes up somebody else should come down. But it’s like anything when you divide responsibility — it often ends up falling through the cracks,” said Webster of PFC.

Those concerns helped undermine oil prices. London Brent eased more than $3 to near $106 a barrel, down from a year-high $127 in April. U.S. crude fell over $4 to near $96.

Rising supply from Saudi Arabia and its Gulf Arab neighbors Kuwait and the United Arab Emirates has kept a leash on oil prices as Riyadh seeks to help nurture global growth by keeping fuel costs under control.

(Reuters) – Applications for refinancing on home mortgages jumped last week, even as demand for new home purchases dried up, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 4.1 percent in the week ended Dec 9.

The MBA’s seasonally adjusted index of refinancing applications climbed 9.3 percent, while the gauge of loan requests for home purchases tumbled 8.2 percent.

The refinance share of total mortgage activity rose to 79.7 percent of applications from 76.0 percent the week before.

Fixed 30-year mortgage rates averaged 4.12 percent, down 6 basis points from 4.18 percent the week before. It was the lowest rate this year, MBA said.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.