Washington, DC, United States (4E) – Mortgage application filings fell 2.5 percent last week from a week earlier due to rising interest rates, according to the Mortgage Bankers Association (MBA) report released Wednesday.
The MBA said the finance index fell 5 percent from the previous week, and the seasonally adjusted purchase index gained 2 percent.
The increase in interest rates had reduced demand for new home purchases and made mortgage refinancing less appealing, though mortgage rates have kept a steady level after a fast rise this summer.
Mortgage interest rates are at its highest in two years and the decline in refinancings will not slow down.
The share of refinancings declined by one percent to 60 percent, the lowest rate of refinancing since April of 2011. Adjustable rate mortgage loans, which account for 7 percent of all applications, increased from 7 percent in the previous week.
The average 30-year fixed-rate mortgage rate with conforming loan balances climbed 4.8 percent, compared with the previous week’s 4.68 percent. The average rate on Federal Housing Administration-backed 30-year fixed-rate mortgages climbed to 4.52 percent, compared with 4.4 percent in the previous week.
Refinancings fell to its lowest level in two years as interest rates climbed back after falling last week, but purchase applications is still higher compared to a year ago.
The weekly report by the MBA covers more than 75 percent of all residential-mortgage applications in the U.S.