Mortgage Applications Drop as Interest Rates Rise
By Caroline Valetkevitch
NEW YORK -- Applications for U.S. home mortgages fell sharply last week as interest rates increased, an industry group said Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 9.2 percent in the week ended June 13.
The MBA's seasonally adjusted index of refinancing applications dropped 12.7 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 4.7 percent.
Fixed 30-year mortgage rates averaged 4.36 percent in the week, up 2 basis points from 4.34 percent the week before.
"Interest rates increased relative to the previous week as incoming economic data continues to suggest a pickup in the pace of growth," said Mike Fratantoni, MBA's chief economist.
The survey covers more than 75 percent of U.S. retail residential mortgage applications, according to MBA.