Buyer Retreat Amid Rising Rates

Overall mortgage application volume was up 6.6 percent year-over-year last week, but dropped 7.3 percent over the previous week, per the latest index data from the Mortgage Bankers Association.

Applications to refinance a home grew 13 percent annually, though were down 11 percent weekly, boosting overall volume. Even though purchase applications were down four percent weekly, they were up three percent YoY, CNBC reports. The average rate for 30-year fixed-rate mortgages increased two basis points to 4.46 percent for the week.

“Borrowers remain extremely sensitive to rate changes,” said Mike Fratantoni, MBA senior vice president and chief economist. “Borrowing costs have recently drifted higher because of ebbing geopolitical concerns, as well as signs of strengthening in the U.S. economy, including the recent data pointing to robust retail sales.”

“The strong economy and job market is keeping buyer interest high, but rising mortgage rates could add pressure to the budgets of some would-be buyers,” Fratantoni said.

Read more