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Mortgage application
An organization within the industry indicated on Wednesday that the number of mortgage applications in the US decreased to a 12-month low after being affected by the one and a half month increase in interest rates.
According to a Mortgage Bankers Association mortgage applications index, which is modified seasonally and takes into account purchases and refinancing of loans, during the week that ended on December 17, a reduction of almost 19 percent was observed. This is the lowest weekly level of mortgage applications since the start of the year.
The mount-long moving average for mortgage applications went down by 9.8 percent. The moving average evens out the unstable weekly numbers.
The decline in the demand for mortgage applications in the last week indicates a general indifference among homeowners in refinancing their present mortgage.
The reduction of over 24 percent in the refinancing applications index of the MBA made it reach its lowest point ever since the week which ended on April 30.
According to Michael Fratantoni of the MBA, the volume in the applications for refinancing rapidly declined while the rates for mortgages reached its highest level in six months. He added that purchases also declined as the number of homes sold will continue to stay low.
The purchase index of the MBA also went down by 2.5 percent, its lowest level in over a month.
The cost of borrowing using a thirty-year mortgage with a fixed rate had a 4.85 percent average. But interest rates were under the 4.92 percent of the previous year. Mortgage rates went up due to the increasing yields in US Treasuries.
When the National Association of Realtors makes the information on current home sales for November available, additional observations can be made on the mortgage applications and the US housing market.
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