Rising rates bring US mortgage activity to a record low since 2014: MBA

(Reuters) – US consumers have filed the smallest number of mortgage applications since the end of 2014, while most real-estate debt costs have reached their highest level in more than seven years, said Wednesday. Mortgage Bankers Association.

Real estate refinancing loan applications have fallen to their lowest level since the end of 2000, while mortgage applications for a home purchase have reached their lowest level in 20 months, according to reports. MBA data.

The Washington-based group's seasonally adjusted index fell 7.1% to 322.1 in the week ending October 12th. This is the lowest reading since 296.9 set the week of December 26, 2014. It also marked the biggest weekly decline in about 13 months.

The latest figures do not include adjustments for the Columbus Day holiday last Monday, said MBA.

Rising mortgage rates are another hurdle for the housing sector, already struggling with lean inventories and rising construction costs.

The interest rates on 30-year bond mortgages, with a balance of $ 453,100 or lower, increased by an average of 0.05 percentage points to 5.10. %, the highest level since February 2011.

Real estate borrowing costs rose in parallel with a sell-off in the US bond market, which boosted yields on benchmark 10-year Treasury bonds to 3.261 percent last Tuesday, its highest level in seven and a half years.

Investors had snapped up on rising inflation and a faster pace of Fed rate hikes, thanks to robust economic data.

Bond yields declined in response to safe haven bond demand driven by the sharp losses in global equity markets. The 10-year yield was about 3.15% Wednesday morning.

The average interest rate on 30-year housing loans guaranteed by the Federal Housing Administration, often used by first-time homebuyers and borrowers with heterogeneous credit, has reached 4, 50%, the highest level since February 2011.

MBA data showed that the interest rates on 15-year and 5-year fixed rate floating rate mortgages averaged 4.50% and 4.34% respectively.

However, the average rate applied to jumbo mortgages, or loans with a balance greater than $ 453,100, increased from 4.99% to 4.98%.

The seasonally adjusted barometer of MBA loan applications for home purchases dropped 5.9% to 224.0, its lowest level since February 2017.

The group's seasonally adjusted indicator for mortgage refinancing applications fell 9.0% to 838.1%, its lowest level since December 2000. Its weekly decline is the largest since July 2017.