Mortgage Applications Drop as Rates Rise

ChartDown_1Mortgage applications fell 6.7 percent last week and hit a four year low as rising interest rates and slowing home sales have put a double whammy on the mortgage marketplace. The anticipation that the Federal Reserve will raise interest rates this week is fortelling that the mortgage industry is going to see a very slow period.

Applications for mortgage loans at U.S. banks dropped by 6.7% last week to the lowest level seen on a seasonally adjusted basis since May 2002, the Mortgage Bankers Association said Wednesday. The number of mortgage applications was down 31% compared with a year ago.

Applications for mortgages to purchase homes fell a seasonally adjusted 6.2%, hitting the lowest level since November 2003. Purchase applications are down 19% in the past year. The MBA’s purchase index is expected to decline another 20% or so, said Ian Shepherdson, chief U.S. economist for High Frequency Economics. Applications for refinancing loans fell 7.5% on a seasonally adjusted basis. Refinance applications are down about 47% in the past year.

The decline in purchase applications has been much steeper than the recent drop in U.S. home sales. New-home sales have sunk about 6% in the past year, while sales of existing homes are down about 7%. The slowdown in home sales “has the potential to translate into a hard landing for the economy because the housing sector has played a major role in the current expansion,” said Asha Bangalore, an economist for Northern Trust.  via MarketWatch.

Related posts:
  1. Mortgage Lending Drops as Interest Rates Rise – Surprised
  2. Interest Rates Rising – Mortgage Activity Slows Down 16 Percent
  3. Poor Treasury Sales May Indicate Mortgage Rates Going Up
  4. Myrtle Beach Neighborhoods See Up To An 80 Percent Drop in Home Sales

Post a Response

« Back to text comment
  • Popular

    Most Comments

    Search

    Tags

    Archives

  • Recent Comments

    • Living in Missouri for such a long time, I am shocked that no Missouri cities have made the list... Apparently ...
      Lake of the Ozarks Real Estate | 11Mar10 | More
    • omg where is maine? Like a lot of cities in Maine are pretty safe. Cept portland lewiston or agusta yaknow
      aaron | 10Mar10 | More
    • The real estate fee of 6% is the most deceptive pricing method in the world. Only 30% of homeowners have ...
      J.J. Gambino | 10Mar10 | More
    • I Have been in correspondance with one of these scammers from Craigslist. I did locate the home in question on ...
      Not Scammed | 10Mar10 | More
    • Our company posts regularly on ActiveRain, and one of the things we try to concentrate on for sure is having ...
      Austin Mortgages | 10Mar10 | More
    • A house of beautiful architecture and well built so turned upside down. How sad. My condolences to the owner.
      Debie Loren | 10Mar10 | More
    • This list is interesting. I did not know of a high incidence of this phenomenon in these cities.
      Debie Loren | 10Mar10 | More
    • This financial crisis disrupted my dream to get my residence.
      Debie Loren | 10Mar10 | More
    • Money management is key. Will these properties be selling short?
      AB Estates International | 10Mar10 | More
    • As a therapist in Spokane WA, I can appreciate this idea of pushing more pet friendly realestate. I have ...
      Spokane Family Therapist | 10Mar10 | More
  • Statistics

  • Friends

  • Subscribe





    Get Updates Delivered Daily By E-Mail:

    Delivered by FeedBurner