Mortgage applications plunged last week to a four-month low after mortgage rates jumped to 4.46% for an average 30-year fixed-rate mortgage, up from 4.28% in the previous week, the Mortgage Bankers Association reported on Wednesday.
Overall applications were down 14.4%, but the plunge was sharper among refinances, which are much more sensitive to swings in rate. Refinance applications were down 16.5%, to the lowest level since July, while purchase applications were down 5%.
The MBA attributed the increase in rates to stronger economic data and “lingering uncertainty regarding the structure and impact” of the Federal Reserve’s new round of debt purchases. Rates have become incredibly volatile over the past week as investors have sold off mortgage-backed securities. Yields on the 10-year Treasury note, to which mortgage rates are closely tied, have climbed steadily over the past week.
The four-week moving average of the index that tracks home-purchase applications is 30% below the levels of April 2010, when home sales were artificially inflated by tax credits, and around 11% below the year-ago levels, when home sales had plunged following the anticipated expiration of home-buyer tax credits.
http://blogs.wsj.com/developments/2010/11/17/mortgage-rates-rise-applications-fall-to-four-month-low/
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