It is a rare scenario where long-term interest rates suddenly fall below short-term interest rates.Real Estateread more
Arturo Estrella has a message for recession naysayers: It could hit sooner than you think.Marketsread more
Fed Chairman Jerome Powell faces the tough challenge of presenting a unified voice on Fed policy from the most divided Fed in years.Market Insiderread more
VMware is following through on its proposal to buy Pivotal, a fellow Dell subsidiary, and expanding into cybersecurity with the acquisition of Carbon Black.Technologyread more
Weisler has been CEO at the company since 2015 when it split from HPE.Technologyread more
Salesforce released its first earnings report since its $15.3 billion acquisition of Tableau Software, the company's largest deal ever.Technologyread more
Dallas Fed President Robert Kaplan would like to avoid additional stimulus but is keeping an "open mind."The Fedread more
Overstock CEO Partick Byrne has resigned from the e-commerce company after making comments about his role in the "deep state."Technologyread more
It was the third trigger of the recession indicator in less than two weeks.Bondsread more
Automakers are trying to deal with President Trump's efforts to roll back Obama-era fuel efficiency rules.Autosread more
Mark Zuckerberg has been on a selling spree in August and has unloaded $526 million worth of stock this year.Technologyread more
Borrowers may have missed an opportunity to get the last of the low rates, as it now appears interest rates are moving decidedly higher.
Mortgage application volume fell 2.7 percent last week, according to the Mortgage Bankers Association's seasonally adjusted report. Volume was 4.5 percent lower than a year ago.
The weakness was most pronounced in applications to refinance a home loan. That volume fell 4 percent to its lowest level since August 2008. Refinance volume is off nearly 17 percent from a year ago, when interest rates were lower. Most borrowers today have little incentive to refinance after a boom a few years ago, when interest rates hit record lows. Rates fell slightly last week, but that was temporary.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.77 percent last week from 4.78 percent the previous week, with points remaining unchanged at 0.50 (including the origination fee) for 80 percent loan-to-value ratio loans.
Interest rates then moved to a seven-year high on Tuesday, after a major sell-off in the bond market. Mortgage rates loosely follow the yield on the 10-year Treasury. The sell-off came after a stronger-than-expected retail sales report, but the real momentum began when interest rates broke through a recent high, resulting in one of the heaviest selling days of the year to date.
Mortgage applications to purchase a home, which are less rate-sensitive week to week, also fell, down 2 percent for the week. Volume was just 4 percent higher than one year ago. Volume should be considerably higher, given the strong demand for housing in an improving economy, but low supply and high competition is holding buyers back. Cash is currently ruling the market, as more investors come back, looking to cash in on fast-rising prices.
Buyers struggling to afford today's steep prices are increasingly turning to adjustable-rate mortgages (ARMs) because they offer lower rates, but unfortunately those rates are rising now as well.
"Jumbo and 5/1 ARM rates increased, with the 5/1 ARM rate increasing to its highest in our survey at 4.09 percent," said Joel Kan, an MBA economist.
Higher interest rates usually slow growth in home prices, but because supply and demand are so out of whack right now, usual trends may not apply. With so many investors competing in cash, prices could continue to rise sharply, leaving fewer and fewer regular buyers able to become homeowners.