Mortgage rates inched higher last week, prompting more buyers and homeowners to retreat from taking out loans.
Total mortgage application volume, which includes refinancing and home purchases, dropped 2.6 percent last week on a seasonally adjusted annual basis, the Mortgage Bankers Association reported Wednesday. The index is now 20 percent lower than a year ago.
Refinancing saw the largest drop last week at 5 percent. Refinancing applications are 38 percent lower than the same week a year ago, when interest rates were lower.
Mortgage applications for home purchases dropped 1 percent during the week. However, purchase applications are still 10 percent higher than a year ago.
The average on a 30-year fixed-rate mortgage rose to its highest level since July last week at 4.22 percent, the MBA reports.
“Rates increased last week as speculation over the next Fed chair continued, and the European Central Bank announced plans to taper its asset purchase program, signaling increased confidence in the euro zone economies,” says Joel Kan, an MBA economist.
However, investors are feeling confident the Fed won’t move rates at its next meeting and will instead choose to do so at its December meeting, writes Matthew Graham, chief operating officer of Mortgage News Daily. Instead, investors are more closely watching President Donald Trump’s pick to replace current Federal Reserve chair Janet Yellen. He’s expected to make his announcement on Thursday.
Source: “Weekly Mortgage Applications Fall 2.6% as Rates Move Even Higher,” CNBC (Nov. 1, 2017)
