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U.S. Mortgage Applications Fall to Lowest
US mortgage applications fell last week to the lowest level since April 2005. It has become well known that higher mortgage rates affected the demand for homes and slowed refinancing. The average rate on a 30-year fixed mortgage jumped to 6.21 percent. It is the highest rate since June 2004. Economists believe that going by the current trends, it seems that decline in housing sector may put negative impact on the economy.
New purchase and refinancing activity are crumbling for the first time. While housing activity remains relatively high and continues to contribute to economic growth, it will quickly fade as mortgage rates continue to rise. The index of both purchases and refinancing was the lowest at 644.5. bloomberg.com reports:
While refinance applications fell, the share of total applications rose to 43.6 percent from 42.5 percent. The percentage of people seeking adjustable-rate mortgages fell last week to 29.4 percent from 29.5 percent.
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