The volume of mortgage applications decreased slightly last week. Mortgage applications fell as interest rates hit the highest point in four years, according to the Mortgage Bankers Association. The seasonally adjusted index of mortgage application activity for the week ending June 16 fell by 0.8% when compared to the week prior. The seasonally adjusted purchase mortgage index was up 0.1%, while the purchase index was substantially below last year's 479.4. The seasonally adjusted index of refinancing applications was also down by 2.2%. The total share of refinancings among all applications decreased to 35.5 %. Historically low mortgage rates for the past five years have led to a housing boom. The rise of interest rates and decrease of housing values is a sign of economic slowdown in the market. The average rate on a 30-year, fixed-rate mortgage was up 0.12 percentage point to 6.73% last week. This is the highest level since May 10, 2002. Fixed 15-year mortgage rates averaged 6.37%, up from 6.27% one week earlier. Adjustable-rate mortgage rates increased to 6.22%. The MBA data follows several reports this week in the housing sector. With the pace of U.S. housing construction up, but the builder sentiment down, mixed information points to a period of uncertainty in the industry. |
