(Bloomberg) – A gauge of U.S. home loan applications fell last week to its lowest level since the end of 2019, indicating that rising mortgage rates are becoming a bigger headwind for the housing market.
The Mortgage Bankers Association index fell 13.1% in the week ended Feb. 18 to 466.4, the Washington-based group said Wednesday.
Group measure loan applications for purchases stumbled more than 10% to the lowest reading since mid-August. The refinance gauge was the weakest since December 2019 after plunging 15.6% last week.
“Rising mortgage rates have brought refinances to a rapid halt, with activity declining in six of the first seven weeks of 2022. Conventional refinances in particular were down 17% in the past week,” said Joel Kan. , Associate Vice President of MBA Economic and Industrial Forecasting. in a report.
The contract rate on a 30-year fixed loan rose slightly last week to 4.06%, the highest since July 2019. Since the end of 2021, the rate has jumped nearly three-quarters of a percentage point.
Rising borrowing costs, amid high house prices and tight inventories, are likely to stifle demand which strengthened at the end of 2021. The strongest in a year, recent data shows.
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