The 30-year fixed-rate mortgage rose above 4 percent last week, prompting home owners to stall in refinancing their loans, which sent overall mortgage applications down, the Mortgage Bankers Association reports.
An index reflecting demand for mortgage applications – both for refinancing and home purchases – dropped 1.6 percent on a seasonally adjusted basis for the week ending May 22, MBA reports. Still, volume is higher than a year ago, but demand has dropped 10 percent in the last four weeks.
“Mortgage rates continued to climb last week due to stronger home sales, rising inflation, and further signals that the Fed is likely to raise their target rate this year,” says Michael Fratantoni, with MBA. “Refinance volume dropped to its lowest level since January.”
Source: “Mortgage Applications Drop 1.6% as Refinancing Stalls,” CNBC (May 27, 2015)