Home loans down as refinancing plunges

U.S. mortgage applications slumped last week, pulled down by a plunge in home refinancing loan demand as interest rates climbed from recent lows.

The Mortgage Bankers Assn. said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended Dec. 15 tumbled 10.2% to 647.6 from the previous week’s 721.2, its highest level in more than a year.

Demand for home purchase loans also weakened as the association’s seasonally adjusted purchase index, widely considered a timely gauge of U.S. home sales, fell 5.9% to 436.5. The index was also 3.7% below its year-earlier level of 453.1.