The mortgage applications were rejected last week
As mortgage rates rose last week, potential home buyers held back on applying for loans and applications were turned down.
Mortgage applications fell 5.7 percent last week, according to data from the Mortgage Bankers Association. Rates on the 30-year fixed mortgage jumped to 6.57%, nine basis points higher than the previous week and the highest level in two months.
Key findings
- Mortgage applications fell 5.7% for the week ending May 12.
- Interest rates rose throughout the week, leading to a drop in mortgage applications.
- Purchase orders were down 4.8% from the previous week.
The index, which tracks seasonally adjusted purchase requests, fell 4.8% from the previous week. The unadjusted purchase index was down 26% from a year ago.
“Purchase orders fell 5% to their slowest pace in a month as buyers remain wary of this rate volatility, but also as for-sale inventory in many parts of the country remains scarce,” said Joel Kahn, vice president and deputy director of the MBA Economist, in a statement.
The MBA refinance index also fell 8% from the previous week and was 43% lower than the same week a year ago. The share of mortgage refinancing activity fell to 27.4% of total applications, down from 28% the previous week.
“Most borrowers have lower interest rates on their mortgages, and those in the market are extremely sensitive to interest rates,” Kahn said.
The Federal Housing Authority filings share fell slightly to 12 percent from 12.1 percent the previous week. The Veterans Administration’s share of total filings fell to 12.2 percent of filings, down from 12.9 percent the previous week.
The average interest rate for 30-year fixed mortgages with conforming loan balances increased to 6.57% from 6.48% the previous week.
The average interest rate for 30-year fixed mortgages with large loan balances increased to 6.46 percent from 6.33 percent a week earlier. The average interest rate on 30-year FHA-backed fixed mortgages fell to 6.39% from 6.41%.