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Applications for home loans all but dried up, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Nov. 11.
The Market Composite Index fell by 9.2 percent on a seasonally adjusted basis and 10 percent on an unadjusted basis from one week earlier. The seasonally adjusted Purchase Index took a six percent stumble from one week earlier to its lowest level since January, while the unadjusted index fell 10 percent—although it was still three percent above the level recorded the same week one year ago. And the Refinance Index declined by 11 percent to its lowest level since March as the refinance share of mortgage activity decreased to 61.9 percent of total applications from 62.3 percent the previous week.
However, there was mostly positive movement among the federal home loan programs. The FHA share of total applications increased to 12.2 percent from 11.6 percent the week prior while the VA share of total applications increased to 12.6 percent from 12.3 percent. The USDA share of total applications saw a scant dip to 0.6 percent from 0.7 percent the week prior.
“Following the election, mortgage rates saw their biggest week over week increase since the taper tantrum in June 2013, and reached their highest level since January of this year,” said David H. Stevens, president and CEO of the MBA. “Investor expectations of faster growth and higher inflation are driving the jump up in rates, and rates have now increased for five of the past six weeks, spurring a commensurate drop in refinance activity."