As mortgage rates continue their climb upward and reach above the 5 percent mark, mortgage loan applications are decreasing.
Mortgage loan applications decreased 9.5 percent on a seasonally adjusted basis for the week ending Feb. 11, compared to one week earlier, according to the Mortgage Bankers Association’s weekly application survey.
Meanwhile, refinance activity also decreased--11.4 percent from the previous week, marking the lowest refinance activity since July 2009.
The purchase index also decreased 5.9 percent from one week prior and is 18.2 percent lower than the same week one year ago.
“Mortgage rates remained above 5 percent last week, up almost a full percentage point from their October lows, and refinance volume continued to drop,” says Michael Fratantoni, MBA’s vice president of research and economics. “Applications for home purchases also declined on a seasonally adjusted basis. Buyers have not returned to the market as rising rates have reduced affordability, to some extent.”
Source: “Mortgage Applications Decrease,” RISMedia (Feb. 17, 2011)