The Wall Street Journal is reporting today that the number of mortgage applications to buy a home fell again to its lowest level in 13-1/2 years. The Mortgage Bankers Association released data showing that applications for new homes dropped by 3.1% last week from the week before.
After seeing a 14-month high two weeks ago, the MBA showed that applications for refinancing declined by 2.9% last week from the week before. The share of applications for refinancing remained unchanged at 78.7%. Overall, The MBA’s application index fell 2.9% last week. (The index was seasonally adjusted for seasonal factors and the July 4 holiday.)
As applications declined, mortgage rates started creeping up last week, according to the WSJ article. Rates on 30-year fixed-rate mortgages went from an average of 4.68% to 4.69%. For 15-year fixed-rate mortgages, the average rate was 4.12%, up from the previous week’s figure of 4.11%. The one-year adjustable rate mortgage rate stayed the same last week at 7.2%. ARMs made up 5.5% of last week’s activity, compared to 5.4% a week earlier.
Economic worries and the elimination of the federal tax credit have been cited as the reasons for the decrease in applications. What’s more, the White House is looking to eliminate the mortgage interest deduction, according to a recent article from The Hill. While the White House claims it will save $208 billion over the next 10 years, it might mean that homeowners who have enjoyed this benefit may stand to lose their homes.
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