US Mortgage Applications Drop as Home Loan Rates Surge to 12-Year High

Source: Reuters

The average home loan rates in the United States grew to the highest level in 12 years last week, in an indication that the housing market may be starting to see a cooldown. ITB is up 1.18%, while XHB is up 0.94%.

• The 30-year fixed-rate average contract rate jumped to 5.20% in the week ending April 15 from 5.13% in the previous week and two percentage points higher annually.
• An uptrend has been recorded for most of the year, driving the fastest growth in home-financing costs after the Fed abandoned its cautious stance.
• The Fed has shifted to faster and more decisive action and is expected to start cutting back its bond-buying program at its next meeting in May.
• Markets have already reacted in anticipation of the tightening, with the 10-year Treasury yields already at the highest level since 2018.
• The higher rates have dragged mortgage applications which declined 3.0% on a seasonally adjusted basis to 254.0, with the refinance index down 8%.