Report: Mortgage rates spike, causing slowdown in applications

Mortgage application rates down, interest rates upThe number of Americans applying for mortgages shrank quickly over the past week, according to statistics from the Mortgage Bankers Association, thanks in part to a sharp upturn in interest rates.

The group said its market composite index, which is a measurement of the number of mortgage applications seen, sank by 7.7 percent when compared to the previous week's figures.

Michael Fratantoni, the MBA's vice president of research and economics, said the strengthening economy may have had something to do with the increased rates and slumping volume for mortgages.

"Mortgage rates increased last week as many incoming economic indicators continue to show stronger growth than had been anticipated. Refinance volume continues to be low, as fewer homeowners with equity have any incentive to refinance. We are at the beginning of the spring buying season, but purchase volume remains weak on a seasonally adjusted basis," he said.

Other economic indicators, however, have been largely positive for the Houston area, as job growth showed signs of returning and economic stress levels continued to drop, experts say.

Economic stress index slightly above state average in Houston

Houston real estate could be affected by economic stressThe Associated Press' measurement of economic stress for the Houston area is slightly higher than the statewide average for Texas, but conditions are still better than in many areas of the country.

Last year saw a decrease in economic stress for all states except for Colorado, Georgia, Florida, Utah and Nevada, the AP said. The latter state, particularly, was still far and away the most troubled by economic conditions, with an index of 22.56, more than twice as high as Texas' 9.45.

Harris County posted a 10.02 mark in December, which represents a decline of 0.25 since the previous month, according to the AP, and unemployment in the area sank by 0.3 points to 8.3 percent. Foreclosures, however, rose slightly month-to-month, up 0.03 percent to 1.27 percent.

While the gains have been slow for economic conditions in the Houston area, they have been no less real for that, and the market for Houston homes continues to be a bright spot in an otherwise murky outlook across the U.S., according to analysts.

Follow

Get every new post delivered to your Inbox

Join other followers: