Mortgage applications are down and rates are up
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Applications for mortgages fell last week as interest rates jumped -- both bad signs for the housing market as it struggles to gain momentum in a lackluster sales environment.
The Mortgage Bankers Assn. said Wednesday that its market composite index, which measures the weekly volume of home loan applications, fell 14.4% on a seasonally adjusted basis last week compared with the week before.
Applications for mortgage refinances fell 16.5% and purchase applications fell 5%, the group said.
Mortgage rates were up, as a sell-off in the bond market pushed up longer-term interest rates across the board. The average rate for a 30-year fixed-rate mortgage jumped to 4.46% from 4.28%, with points increasing to 1.13 from 1.04 for loans that would cover 80% of the value of a home.
The average rate for a 15-year fixed-rate mortgage increased to 3.87% from 3.64%, with points falling to 0.91 from 1.08.
Michael Fratantoni, the bankers assocation’s vice president of research and economics, said the increase in rates was due to stronger economic data and rising concern over the Federal Reserve’s ‘quantitative easing’ program, under which the Fed plans to buy $600 billion worth of Treasury bonds by mid-2011.
-- Alejandro Lazo