The Mortgage Bankers Association said that mortgage applications for both purchase and refinance loans decreased 3.5 percent last week. There was a drop in demand for home refinancing loans as interest rates soared to their highest levels since June. However, applications for loans to buy homes, an early indicator of sales, rose slightly.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.38 percent, up 0.21 percentage point from the previous week. It was the highest rate since the week ended June 19 and significantly above the all-time low of 4.61 percent set in the week ended March 27. The survey has been conducted weekly since 1990. Interest rates a year ago were at 6.57 percent. Mortgage rates were above 5 percent for an 11th straight week, and some experts believe rates at 5 percent and below are required to make a significant impact on the demand of home loans.
