Mortgage demand falters as interest rates rise for the first time in a month
DFW housing and macro economic analyst Amy Nixon says the longer rate cuts hold off, the higher rates have to stay on 'Making Money.'
A key measure of home-purchase applications fell to a three-month low as mortgage rates started to rise again.
The Mortgage Bankers Association's (MBA) index of mortgage applications slid 5.7% for the week ended May 24, according to new data published Wednesday.
The data also showed that the average rate on the popular 30-year loan rose to 7.05% last week from the previous level of 7.01%. While that is down from a peak of 8% in October, it marks the highest level for interest rates in a month.
«Mortgage rates increased for the first time in four weeks, with the 30-year fixed rate up to 7.05% and all other loan types also seeing increases,» said Joel Kan, MBA's vice president and deputy chief economist. «The uptick in rates led to a decline in mortgage applications heading into Memorial Day weekend.»
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A home for sale in Cupertino, California, on Feb. 7. (Loren Elliott/Bloomberg via Getty Images / Getty Images)
Housing demand cooled as rates moved higher. Applications for a mortgage to purchase a home dropped 1% from the previous week. Application volume is down 10% compared with the same time last year.
Demand for refinancing also fell last week, tumbling 14% from the previous week, according to the survey. Compared with the same time last year, refinance applications are up 12%.
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The interest rate-sensitive housing market has cooled rapidly as a result of the Federal Reserve's aggressive tightening campaign, which sent interest rates to the
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