Saudi Arabia has shut down half of its oil production after drones attacked the world's largest oil processing facility in the kingdom.Marketsread more
Yemen's Houthi rebels have claimed responsibility for the attacks, which created a huge fire at a processor essential to global energy supplies.Politicsread more
Oil prices are expected to jump as much as $10 per barrel after a coordinated drone strike hit Saudi Arabia's largest oil field, forcing the kingdom to cut its oil output in...Marketsread more
Trusii's hydrogen water machines were supposed to help users with their health problems, but customers claim the company is involved in a giant scam.Technologyread more
The decoupling of the world's two weightiest economies seems as inescapable as its extent and global impact remains incalculable.Politicsread more
The trucking industry is worth hundreds of billions of dollars per year. Uber is going after this market with Uber Freight, an online platform that matches truckers with...Technologyread more
BlackBerry has reinvented itself to become a leader in securing mobile communications and in embedded communications. Next year it plans to roll out new products. CEO John...Evolveread more
Trailers have become a cult phenomenon. Even short teasers that reveal little about the plot of the upcoming film are headline-worthy. Blogs and forums have become devoted...Entertainmentread more
Thanks to the performance of Beyond Meat, investors who focus on venture-backed tech IPOs have done well this year despite some notable disappointments.Technologyread more
Software company Intuit, maker of tax helper TurboTax, is in its eleventh year of stock gains and up 36% this year.Investingread more
CNBC did a deep dive through the most recent Wall Street research to find stocks with upside potential.Marketsread more
Home loan borrowers moved to the sidelines amid a sharp rise in interest rates last week.
Total mortgage application volume fell 3.5 percent on a seasonally adjusted basis for the week ending May 8th from one week earlier, according to the Mortgage Bankers Association (MBA). Volume is still 14 percent higher than a year earlier, but that annual comparison has been shrinking for several weeks.
Applications to refinance, which are the most rate-sensitive, fell 6 percent week-to-week and have dropped 16 percent in the past four weeks; they are still 15 percent higher than a year earlier as interest rates were slightly higher in May of 2014. The refinance share of mortgage activity decreased to 51 percent of total applications, its lowest level since May 2014.
That comes as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.00 percent, its highest level since March 2015, from 3.93 percent, with points increasing to 0.36 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans, according to the MBA survey.
"Just a few short weeks ago, the average rate was 3.625 percent. That makes this the most abrupt move higher in roughly two years, with the last notable example being the mid-2013 'taper tantrum,'" noted Matthew Graham of Mortgage News Daily, referring to the sharp rise in rates after the Federal Reserve first broached the idea it would "taper" its purchases of mortgage-backed bonds.
Applications to purchase a home were basically flat last week, down 0.2 percent from the previous week, a troubling sign in the height of the spring housing market. They were, however, 12 percent higher than a year earlier. Most don't blame higher rates for the unexpectedly sluggish spring market.
"I do not feel that this [rising rates] will have a significant impact on our housing market, especially since the government's recent reduction in FHA's mortgage insurance premiums have made the program more affordable and easier for homebuyers to come into the market," said Matt Weaver, VP of Sales for PMAC Lending Services.
The weakness in mortgage applications to purchase a home may have less to do with higher interest rates and more to do with very few listings for sale. Real estate agents across the nation are reporting stiff competition for the limited supply, leading to more bidding wars. This may push home prices higher at an unhealthy pace.
Interest rates moved even higher Tuesday, amid a selloff in the bond market. Mortgage rates loosely follow the yield on the 10-year Treasury, which rose to its highest level in six months. Rising rates can have the effect of pushing some potential buyers off the fence, worried that they will miss out on what are still historically low rates. That, however, is a short-term phenomenon. Higher rates reduce purchasing power, plain and simple.