Surging mortgage rates lead to steep decline in application volume

Surging rates hurt mortgage application volume.With mortgage rates rising significantly in the final week of June, applications for purchases and refinancing declined markedly, which likely had an impact on the Houston real estate market.?Total application volume decreased 11.7 percent during the week ending June 28 from the previous seven day period, according to the Mortgage Bankers Association.?The drop in applications was largely drive by the falling Refinance Index, which hit the lowest level since July 2011. The refinance share of all activity fell from 67 percent to 64 percent.?Purchase requests weren't affected nearly as much by surging rates, only dropping 3 percent from the previous week.?Despite both 15- and 30-year fixed-rate mortgages skyrocketing in the week ending June 27, Freddie Mac vice president and chief economist Frank Nothaft said affordability is still high.?”Higher mortgage rates may dampen some housing market activity but the effect will be muted by the high level of buyer affordability, and home sales should remain strong,” he said. “For instance, existing home sales in May rose to its strongest pace since November 2009 and new home sales were the most seen since July 2008.”Real Estate News brought to you by 2M Realty, a true expert in the online real estate market.

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