The U.S. home loan demand fell sharply in the week ended Dec.17, posting a decline for four straight weeks as the mortgage rates hit a six-month high, the Mortgage Bankers Association (MBA) said on Wednesday.
The total loan applications index, a measure of mortgage loan application volume, fell 18.6 percent on a seasonally adjusted basis from a week earlier.
The refinancing loans index was down 24.6 percent last week, posting a decline for sixth consecutive week. The index touched its lowest level since the week ending April 30, 2010.
“Refinance application volume dropped sharply this week as mortgage rates held near six month highs,” said Michael Fratantoni, vice president, research and economics, MBA.
While the average contract interest rates for 30-year fixed rate mortgage increased to 4.85 percent from 4.84 percent in the previous week, 15-year fixed-rate mortgages increased to 4.22 percent from 4.21 percent.
Also, the purchase index decreased 2.5 percent in the week, posting a decline for two consecutive weeks.
“Purchase applications fell for a second week, with the level of applications little changed over the past month, indicating that home sales are likely to remain relatively weak over the next few months,” Fratantoni added.