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US Mortgage Applications Slumped Last Week as Rates Rose: MBA

Mortgage application
Mortgage application

Applications for U.S. home mortgages fell last week, with purchase and refinance demand drying up as interest rates rose for the fourth week in a row, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, was down 6.4 percent in the week ended Jan 8.

The index of refinancing applications fell 5.5 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, slumped 9.5 percent.

(Read More: Beware the Escape Hatch in the New Mortgage Rules)

The refinance share of total mortgage activity was unchanged at 78 percent of applications.

Fixed 30-year mortgage rates averaged 3.75 percent, up 2 basis points from 3.73 percent the week before. It was the fourth week in a row the rate has increased, putting it at its highest level since September 2012.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

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