Following an upswing, interest in mortgages across the U.S. took a tumble last week, according to new numbers out from the Mortgage Bankers Association.
The MBA reports that applications decreased 14.2 percent week-over-week. The Refinance Index decreased 18 percent from the previous week and was 86 percent lower than the same week one year ago.
“Mortgage rates continued to climb last week, causing another pullback in overall application activity, which dropped to its slowest pace since 1997. The 30-year fixed rate hit 6.75 percent last week—the highest rate since 2006,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The current rate has more than doubled over the past year and has increased 130 basis points in the past seven weeks alone. The steep increase in rates continued to halt refinance activity and is also impacting purchase applications, which have fallen 37 percent behind last year’s pace. Additionally, the spreads between the conforming rate compared to jumbo loans widened again, and we saw the ARM share rise further to almost 12 percent of applications.”
The refinance share of mortgage activity decreased to 29.0 percent of total applications from 30.2 percent the previous week.