Industry News

Surging interest rates scare off borrowers

30-year fixed at highest point in 4 years, survey finds

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Overall mortgage applications fell 6.7 percent last week on a seasonally adjusted basis from the week before, as sharp gains in interest rates dissuaded borrowers, the Mortgage Bankers Association reported today. The seasonally adjusted purchase index decreased by 6.2 percent to 389 from 414.8 the previous week, and the refinance index decreased by 7.5 percent to 1,356 from 1,466.1 one week earlier. The refinance share of mortgage activity decreased to 35.3 percent of total applications from 35.5 percent the previous week. The adjustable-rate mortgage share of activity decreased to 29.1 percent of total applications from 29.6 percent the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 6.86 percent from 6.73 percent, and is now at the highest level since April 2002, according to MBA. Points including the origination fee decreased to 1.1 from 1.14 for 80 percent loan-to-value ratio loans.  Points, which are fees charged by lenders ...