Mortgage applications for home purchases and refinancing continued to fall, dropping 11.5 percent last week, amid rising mortgage rates. Interest rates rose above 4 percent for the first time in a year, according to the Mortgage Bankers Association.
Applications for refinancings saw the largest declines, with applications falling 15 percent last week, the MBA reports. Meanwhile, applications for home purchases, an indicator for future home sales, fell 1.6 percent last week.
Many analysts blame the decreasing applications on rising mortgage rates. The fixed 30-year mortgage rate averaged 4.07 percent for the week ending May 31, its highest level since April 2012, the MBA reports. Fed chairman Ben Bernanke recently indicated that the Fed may soon scale back its bond purchase program, which has helped to keep mortgage rates near all-time record lows.
Source: “Mortgage applications drop as rates surge: MBA,” Reuters (June 5, 2013)