Mortgage applications in the US reached the lowest level in five weeks as rates rose amid concerns over inflation and global public debt, the Mortgage Bankers Association said Wednesday.
The market composite index, which measures loan application volume, fell 2.3% for the week through Friday on a seasonally adjusted basis. Without adjustment, the index decreased 3%.
"Ongoing concerns around inflation from higher fuel costs, combined with rising concerns over global public debt, pushed Treasury yields higher in the US and abroad last week," said Joel Kan, the MBA's deputy chief economist. "Overall applications were down to the lowest level in five weeks as purchase borrowers pulled back across conventional and government loan types."
The average fixed rate for 30-year mortgages with conforming loan balances of $832,750 or less increased to 6.56% from 6.46% a week ago, reaching its highest level in seven weeks, according to Kan.
For loan balances higher than that amount, the rate rose to 6.58% from 6.48%. For 15-year loans, the rate increased to 5.93% from 5.83%, MBA data showed.
Fixed-rate mortgages with 30-year terms backed by the Federal Housing Administration increased to 6.24% from 6.16%. The share of FHA loans, which are often used by first-time home buyers and can involve smaller down payments, was unchanged at 17.9% of total applications.
The seasonally adjusted purchase index dropped 4% on a weekly basis, while the refinance index eased 0.1%, according to the report.
"Refinance applications were essentially unchanged, with a decline in government refinances and an increase in conventional refinancing, likely as the increase in rates came late in the week," Kan said.
