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Home»Finance»Mortgage applications drop 1.2% on highest rates since June
Finance

Mortgage applications drop 1.2% on highest rates since June

DeepBy DeepNovember 13, 2016No Comments2 Mins Read
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The refrain is becoming all too familiar. Mortgage interest rates rise, and homebuyers and refinancers retreat.

Total mortgage application volume fell 1.2 percent last week from the previous week, according to the Mortgage Bankers Association. Volume is down nearly 11 percent in the past four weeks, as rates climbed.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since June, 2016, 3.75 percent, from 3.71 percent, with points decreasing to 0.36 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio loans.

Mortgage services signage outside a Berkshire Hathaway Home Services office in Montclair, N.J.

Adam Jeffery | CNBC
Mortgage services signage outside a Berkshire Hathaway Home Services office in Montclair, N.J.

“Globally, rates have begun to creep upwards as investors anticipate less aggressive monetary policies from central banks, and U.S. rates are being pushed upwards in response,” said Michael Fratantoni, the MBA’s chief economist. “Additionally, new data show continued positive signals regarding the job market and rising inflation, indicating that the Fed is likely to hike in December and will continue increasing rates next year.”

Mortgage applications to refinance, which are most rate-sensitive, continued their decline, down 2 percent for the week, seasonally adjusted. Refinance activity is still 23 percent higher than one year ago, when mortgage rates were higher.

Loan applications to purchase a home, while less rate-sensitive, backed off as well, falling 0.4 percent for the week. Purchase applications are now 9 percent higher than one year ago. At the beginning of this year the annual gains were in the double digits.

The Federal Reserve is not expected to raise interest rates Wednesday but could do so in December and again before the all-important spring housing season. With home-price gains accelerating again now, that could be a double whammy to sales. The home ownership rate did bounce higher in the latest quarter, but analysts expect it will fall further before bottoming out.

source”cnbc”
1.2% applications drop highest June Mortgage on rates since
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