Expectations the Federal Reserve will slow its economic stimulus program by the end of the year continued to push U.S. mortgage rates higher last week, sapping demand from potential homebuyers, data from an industry group showed on Wednesday.
Rates jumped to the highest level since July 2011, which also cut into refinance activity. The share of refinance applications fell to the lowest level in more than two years.
Interest rates on fixed 30-year mortgage surged 12 basis points to average 4.58 percent in the week ended June 28, the Mortgage Bankers Association said.
"At these rates, many fewer homeowners have an incentive to refinance," Mike Fratantoni, MBA's vice president of research and economics, said in a statement. "Purchase application volume also declined, but not nearly to the same extent, as affordability remains strong."
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