Higher mortgage rates mean fewer people are applying for home loans or refinancing their loans.
The Mortgage Bankers Association said total loan applications fell 14.4 percent from just this past week. Home loan applications to refinance fell 16.5 percent from a week earlier, and applications to purchase a home fell 5 percent.
A national review of mortgage rates by Bankrate.com found the average confirming 30-year fixed mortgage also increased over the past two weeks to 4.62 percent.
The average 15-year fixed-rate mortgage increased to 4.02 percent and the bigger 30-year fixed-rate mortgage rose to 5.24 percent. Adjustable rate mortgages also rose higher.
It was the second consecutive weekly increase in mortgage rates since the Federal Reserve announced new efforts to help the economy. Concerns that the Fed’s latest quantitative easing initiative would lead to high inflation, along with strong reports on retails sales and unemployment filings fueled in the latest mortgage rate increase.
Despite the increase, mortgage rates will continue to be at historic lows and won’t keep qualified borrowers from securing loans in the near future, according to Bankrate.com.
Mortgage rates have not gone above 6 percent since Nov. 2008.
The declining number of applications comes at the same time that interest rates for fixed-rate mortgages increased because of a stronger economic outlook and worries over the Federal Reserves major bond-buying imitative.
Rates had approached their lowest rates in decades earlier this year as investors transferred their money to more secure Treasury bonds. Mortgage rates often mimic bonds’ yields, which has been lower in the past.