Expectations the Federal Reserve will slow its economic stimulus program by the end of the year continued to push mortgage rates higher last week, sapping demand from potential homebuyers, data from an industry group showed on Wednesday.
Rates jumped to the highest level since July 2011, which also cut into refinance activity. The share of refinance applications fell to the lowest level in more than two years.
Interest rates on fixed 30-year mortgage surged 12 basis points to average 4.58 percent in the week ended June 28, the Mortgage Bankers Association said.
While the rise in rates had appeared to cause some potential buyers to get into the market earlier in June, MBA's seasonally adjusted index of loan requests for home purchases decreased 3.1 percent last week.
Refinancing activity was hit much harder and the index tumbled 15.6 percent last week. The refinance share of total mortgage activity slumped to 64 percent of applications from 67 percent the week before. It was the lowest level since May 2011.
The overall index of mortgage application activity, which includes both refinancing and home purchase demand, slid 11.7 percent.
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.
Source: Reuters
Source: Reuters
