Rates Hit 9-Month High, Loan Demand Falls
Diana Olick | July 1, 2015
With interest rates reaching a nine-month high last week, mortgage applications took a dive after consumers found fewer savings.
Overall mortgage applications — reflecting both refinancings and home purchases — dropped 4.7 percent week-over-week on a seasonally adjusted basis for the week ending June 2, according to the Mortgage Bankers Association reports. They are now at their lowest level since Jan. 2.
At the same time, the average 30-year fixed-rate mortgage increased to 4.26 percent last week, the highest average since October 2014, MBA notes.
"Rates drifted up further last week due to stronger U.S. economic data, even with the worries about a potential default of Greek debt this week," MBA Chief Economist Michael Fratantoni says.
Broken out, refinance applications dropped 5 percent week-to-week, reaching the lowest level since December of last year. Mortgage applications for home purchases decreased 4 percent for the week. However, applications for home purchases remain 14 percent higher than the same week one year ago.