With interest rates on the rise in recent months, mortgage applications declined for the third consecutive week. The real estate market has been one of the strongest pillars in the economic recovery, but higher interest rates are starting to weigh on affordability levels across the nation.
According to the Mortgage Bankers Association’s latest report, for the week ended August 23, loan applications dropped 2.5 percent on a seasonally adjusted basis from one week earlier — the fourteenth decline in 16 weeks. The figure includes both refinancing and home purchase demand and cover more than 75 percent of all domestic retail residential mortgage applications.
The industry group’s refinance index declined 5 percent while the seasonally adjusted purchase index managed to gain 2 percent. Overall, the refinance share of mortgage activity accounted for 60 percent of total applications, its lowest level in over two years. In fact, the refinance index has crashed 64.2 percent from its peak during the week of May 3, 2013.