Home >> News >> Data >> Rising Rates Weigh Down Mid-October Lending Activity
Print This Post Print This Post

Rising Rates Weigh Down Mid-October Lending Activity

Mortgage applications fell 12 percent for the week ending October 19, according to data from the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA).

[IMAGE]

The group's Market Composite Index showed a 12 percent decline (on a seasonally adjusted basis) in mortgage loan application volume from the previous week, which was adjusted upward for the Columbus Day holiday. On an unadjusted basis, the index fell 2 percent from the previous week.

[COLUMN_BREAK]

The Refinance Index fell to its lowest level since late August, slipping 13 percent. At the same time, the refinance share of mortgage activity dropped to 81 percent of total applications from 82 percent the previous week. In a ""forecast released earlier in the week"":https://themreport.com/articles/mba-projects-purchase-origination-growth-in-2013-as-refinances-slide-2012-10-24, the association projected refinances will fall to $785 billion in 2013 from a revised $1.2 trillion in 2012.

Meanwhile, the seasonally adjusted Purchase Index decreased 8 percent from last week. The unadjusted Purchase Index actually increased 2 percent compared with the previous week, bringing it 7 percent higher than the same week one year ago.

The fall in overall activity is attributed to rising mortgage rates. For the week ending October 19, the average contract interest rate for a 30-year fixed-rate mortgage with a conforming loan balance increased to 3.63 percent, its highest level since late September.

With mortgage rates not expected to sink further by any significant amount, many experts are urging consumers to take advantage of current rates before they pick back up.

x

Check Also

Survey: Homeownership Remains Elusive for Baby Boomer Renters

A recent look into housing affordability by NeighborWorks America has found that three in five long-term baby boomer renters feel homeownership remains unattainable.