USA mortgage applications declined last week as home borrowing costs climbed to their highest levels in over seven years, propelled by a spike in bond yields during last week's market selloff, the Mortgage Bankers Association said on Wednesday.
The Market Composite Index, a measure of mortgage loan application volume, fell 1.7% on a seasonally adjusted basis and slipped 2% on an unadjusted basis. These numbers represent data gathered in a survey conducted by MBA accounting for over 75 percent of all USA retail residential mortgage applications.
"There's nearly a generation that has been used to seeing 3 percent or 4 percent rates that's now seeing 5 percent rates", Vishal Garg, founder and CEO of Better Mortgage, told the Journal.
The average fee on 30-year fixed-rate mortgages rose to 0.5 point from 0.4 point last week.
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The interest rates on five-year adjustable mortgages averaged 4.07 percent, up from 4.01 percent the prior week and 3.16 percent a year earlier.
Mortgage rates moved to the highest level in seven years this week, with the average rate for a 30-year fixed-rate mortgage climbing to 4.90%, up from 4.71% the previous week, according to Freddie Mac's Primary Mortgage Market Survey. "Rates are now at their highest level since the week of April 14, 2011".
Mortgage buyer Freddie Mac said Thursday the rate on 30-year, fixed-rate mortgages jumped to an average 4.90 per cent this week from 4.71 per cent last week. 5/1 ARMs increased to their highest levels since the series was initiated in 2011, up from 4.24 to 4.29 percent.