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Wednesday, July 6, 2011

Mortgage applications drop 5.2% on higher interest rates

Mortgage rates had a slight increase last week, we are seeing the affect on the mortgage market.  The purchase index actually increased!

Meanwhile, the refinance index fell for the third-consecutive week, dropping 9.2% over the previous week and the seasonally-adjusted purchase index grew 4.8%.
"Stronger economic data towards the end of the week coupled with the end of the Fed's second round of quantitative easing helped bring mortgage rates to their highest level in over a month," said Michael Fratantoni, MBA's vice president of research and economics. "Refinance activity, already constrained by a smaller pool of eligible borrowers, declined in response to the higher rates, but purchase applications picked up appreciably in the week before the July 4th holiday."
The four-week moving averages for the market index and refinance index fell 0.5% and 1.1%, respectively, while the four-week moving average for the purchase index is up 0.8% on a seasonally adjusted basis.
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