Spiking U.S. mortgage rates drove down total home loan applications last week as demand for refinancing shriveled to the lowest level since November, the Mortgage Bankers Association said on Wednesday.This could very possibly put an end to our recent months of good news, with a new bottom looming on the frontier. If rates stayed low long enough to absorb the inventory on the market (already heading in the right direction), we'd be in better shape. Now, I'm afraid we'll see a period of increased supply (especially "shadow inventory" being held by banks) and higher interest rates. Let's hope they fall again, soon.
The swift rate rise crimps affordability, likely cutting offer prices on home sales and prolonging a housing turnaround.
Borrowing costs have soared as bond yields have risen, even as the Federal Reserve has sopped up hundreds of billions of dollars in bonds to keep rates low and stimulate the housing market.
The average 30-year fixed mortgage rate jumped 0.32 percentage point in the June 5 week to 5.57 percent. That was nearly a full point, about 100 basis points, above the record low rate of 4.61 percent in March, the trade group said.
SOURCE: REUTERS via YAHOO NEWS
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