With interest rates creeping upwards last week, some home shoppers are showing signs of concern and holding off from making a purchase.
According to a report from the Mortgage Bankers Association, loan application volumes for both home purchases and refinancings fell by 0.2 percent last week, and are now 0.8 percent lower than one year ago.
The MBA said applications for both home purchases and refinance have stalled, with applications for the latter falling by 0.3 percent while applications for the former remain flat. Refinance applications, which are usually the most sensitive to interest rate changes, are now down 16 percent compared to one year before. They also account for the lowest percentage of all mortgage applications since September 2008.
The MBA said incentive to refinance was reduced after the 30-year fixed-rate mortgage rate hit an average of 4.73 percent last week, it’s highest since September 2013.
“Treasury rates increased significantly last week, partly driven by the market’s reaction to more hawkish comments from key Fed officials and positive economic news on strong retail sales and declining jobless claims,” said MBA economist Joel Kan.
Still, it’s not all bad news for lenders. Although the number of applications for home purchases has stalled, it’s still 11 percent higher than it was one year ago.
"Whereas rates had leveled off and even improved somewhat during March and early April, they've quickly shown more volatile colors," Mortgage News Daily reported.
Mortgage rates continued to climb this week, and some lenders say they are now a quarter percentage point higher than 2018’s top levels.