Rising mortgage rates are starting to take their toll on new residential loan applications, according to figures released by the Mortgage Bankers Association.
MBA reported Wednesday morning that application volume decreased by 2.3% for the week ending December 10, compared to the prior week.
As of last Friday, the average contract rate on a 30-year FRM was 4.84% — and since that time the yield on the benchmark 10-year Treasury bond has increased even more, sending rates to a six-month high.
MBA found that refinancing applications fell 0.7% while purchase apps ended a streak of three consecutive weeks of increases by declining 5%. (The figures are seasonally adjusted.)
Refis continue to dominate the market with a share of 76.7% as of Dec. 10.
"Treasury rates increased last week following news that lower tax rates could be extended for another two years, boosting growth prospects," said Michael Fratantoni, MBA's vice president of research and economics. He noted that even with the decline in purchase apps, they remain at the same levels seen in May.
MBA tracks activity through its proprietary application index.
