The number of people applying for a mortgage fell last week as higher rates discouraged borrowing.
The Mortgage Bankers Association said Wednesday its overall mortgage
application index decreased 18.6 percent from the previous week. The
refinance index dropped 24.6 percent, marking the sixth decline in a
row. The purchase index slipped 2.5 percent last week.
The refinance share of activity fell to 72.3 percent of all applications from 76.7 percent the previous week.
Rates on fixed mortgages continued to edge up last week, remaining at
the highest levels in six months. The survey said the rate on a 30-year
fixed mortgages rose to 4.85 percent from 4.84 percent. The rate on a
15-year loan, a common refinance option, inched up to 4.22 percent from
4.21 percent.
Mortgage rates are rising because Treasury yields have been
increasing on rosier economic data and expectations that tax cuts will
spur growth and spark higher inflation. Rates tend to track those
yields.
Rates had been hitting decade lows almost every week since spring as
investors, worried about the economy, sought less risky Treasury bonds.
As the economy improves, investors feel more confident about putting
money in riskier investments like stocks.
In related news, more people bought previously occupied homes in
November, the third gain in four months following a dismal summer, the
National Association of Realtors said Wednesday. Sales increased 5.6
percent from the month before to a seasonally adjusted annual rate of
4.68 million units.
Still, the pace is 10 percent below what analysts consider a healthy rate.
