Mortgage applications plummeted 11.7% from a week earlier as the industry continued to panic over the Fed’s future involvement in the mortgage bond market.
The average contract interest rate for a 30-year, fixed-rate mortgage with a conforming loan balance continued its climb to 4.58% from 4.46% a week earlier, reaching the highest it’s been since July 2011, the Mortgage Bankers Association reported.
Meanwhile, refinance applications posted a heavy drop as well, tumbling 16% to the lowest level since 2011.
The purchase index ticked back down 3% after a slight increase last week.
In light of the hike in mortgage rates and a dip in refi applications, refinancing activity fell to 64% of total applications: the lowest level since May 2011.
“Mortgage rates reached their highest point in two years last week. At these rates, many fewer homeowners have an incentive to refinance, and refinance application volume declined more than 15%,” said Mike Fratantoni, MBA’s vice president of research and economics.
He added, “With this decline in volume, the refinance share dropped to its lowest level in more than two years. Purchase application volume also declined, but not nearly to the same extent, as affordability remains strong.”
The 30-year, FRM jumbo increased to 4.68% from 4.52% a week earlier, which is the highest rate since October 2011.
Hitting the highest rate since September 2011, the average 30-year, FRM backed by the FHA escalated to 4.27% from 4.20%.
The 15-year, FRM also grew to 3.64% from 3.55%, while the 5/1 ARM inched up to 3.33% from 3.06, both reaching their highest level since July of 2011.