Interest rates rose last week, prompting a sharp fall in applications for home mortgages, the Mortgage Bankers Association reported Wednesday.
Loan applications dropped 9.2 percent in the week ending June 13, according to the MBA’s index of mortgage application activity. The MBA’s survey, which reflects 75 percent of the residential mortgage market, measures application demand for both refinancing and home purchases.
Broken out, applications for refinancing fell 12.7 percent last week. Applications for home purchases, viewed as a major indicator of future home purchases, dropped 4.7 percent, the MBA reports.
Mortgage rates were on the rise last week, with the 30-year fixed-rate mortgage rising 2 basis points to 4.36 percent.
The decrease in applications this week comes after a report last week that showed mortgage applications for home purchases had reached a five-month high.
Source: “U.S. Mortgage Applications Drop in Latest Week: MBA,” Reuters (June 18, 2014)