May 24, 2018

Mortgage Applications Drop as Borrowing Costs Rise

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Mortgage Applications Drop as Borrowing Costs Rise

For the fourth time in five week, mortgage applications posted drops last week, according to the latest reading on the Mortgage Bankers Association’s index. Mortgage applications, reflecting applications for both refinancings and home purchases, fell 3.3 percent for the week ending April 18.

For the first time in six weeks, applications for home purchases, viewed as a leading gauge for future home sales, dropped 2.6 percent this week. It had been the longest run of consecutive gains since November 2012, according to the MBA.

The gauge measuring applications for refinancings dropped 3.7 percent last week.

As applications dropped, borrowing costs inched higher last week. The average on a 30-year fixed-rate mortgage increased to 4.49 percent, from 4.47 percent the prior week, the MBA reports. The 15-year fixed-rate mortgage increased to average 3.55 percent, from 3.54 percent in the prior week.

Source: “Mortgage Applications in U.S. Fell Last Week as Rates Climbed,” Bloomberg (April 23, 2014)