The Mortgage Bankers Association reported Wednesday that mortgage applications plummeted to their lowest level in almost a year as demand has taken a serious hit from six straight weeks of rising interest rates. The group's seasonally adjusted index of applications, including both purchase and refinance loans, fell 18.6 percent for the week ending December 17th, to its lowest level since the week ending January 1st.
The group's four-week moving average of claims, a measure designed to smooth out seasonal volatility, also dropped, by 9.8 percent. The drop in overall applications was mainly caused by an even steeper drop in refinance applications of 24.6 percent, hitting their lowest level since the week ending April 30th. The MBA's purchase index also dropped, by 2.5 percent, reaching its lowest level since the week ending November 12th.
Housing demand has fallen in recent weeks as interest rates have climbed. Borrowing costs on a 30 year fixed-rate mortgage, excluding fees, averaged 4.85 percent for the week, up 0.01 percent from the week prior. The 30 year fixed interest rate is, however, still below their year ago level of 4.92 percent. 15 year fixed-rate mortgages, meanwhile, averaged an interest rate of 4.22 percent, up from 4.21 percent in the previous week.
-- Edited by Marin Real Estate on Thursday 23rd of December 2010 11:56:04 PM
