As Rates Rise, Mortgage Applications Fall

Bloomberg writer Scott Lanman reported today that, “A gauge of U.S. mortgage applications fell last week to the lowest level in almost four years as borrowing costs hit the highest since 2010, adding to challenges for the housing market.

“U.S. Mortgage Applications Hit Lowest Since 2014 as Rates Rise,” by Scott Lanman. Bloomberg News (November 7, 2018).

“The Mortgage Bankers Association’s market composite index fell 4 percent in the week ending Nov. 2 to 316.2, the lowest reading since December 2014, according to a report Wednesday from the Washington-based group. The survey’s contract rate on a 30-year fixed loan rose to 5.15 percent from 5.11 percent, while a gauge of applications to purchase homes dropped 5 percent to the lowest in about two years.”

The Bloomberg article noted that, “The data signal higher mortgage costs are an ever-growing headwind for U.S. homebuyers, who already face a dearth of affordable listings. Residential investment has been a drag on economic growth for five of the past six quarters, and recent data show cooling in sales in construction.”

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