Applications fall 10.5% as 30-year fixed rate moves higher

"Higher rates are starting to bite into growth. Purchase applications still showed positive year-over-year growth, but it was weaker, and week-to-week data was negative."

"The refinance index decreased 15% from the previous week and was 52% higher than the same week one year ago. The seasonally adjusted purchase index decreased 5% from one week earlier."

"Given this period of increasing mortgage rates and diminishing refinance incentives, refinance applications decreased 15% as applications across all loan types declined."

"As average contract interest rates for 30-year fixed-rate mortgages with conforming loan balances increased to 6.43% from 6.30%, rates for 30-year fixed-rate mortgages with jumbo loan balances increased to 6.45% from 6.39%."

Higher mortgage rates are affecting growth in the housing market. Purchase applications showed year-over-year growth but weakened week-to-week. The refinance index dropped 15% from the previous week, although it remains 52% higher than last year. The purchase index decreased by 5% from the previous week. Economic uncertainty and affordability issues are causing potential homebuyers to hesitate. The refinance share of mortgage activity fell to 49.6%, while the ARM share increased to 8.1%. Average interest rates for various mortgage types have also risen.

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