U.S. mortgage applications fell last week, with demand for home purchase loans dropping to a 12-year low even as interest rates on 30-year loans fell to their lowest level in six months, data from an industry group showed on Wednesday.

Home purchase loan demand fell for a sixth straight week, a trend that does not bode well for the U.S. housing market, which has been showing signs of stabilization after a three-year slump.

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