NEW YORK – U.S. mortgage applications fell last week as interest rates hit their highest in over four years, an industry trade group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended June 23 decreased 6.7 percent to 529.6 from the previous week's 567.6.
Click here to visit FOXBusiness.com's Real Estate page.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.86 percent, up 0.13 percentage point from the previous week, its highest level since April 12, 2002 when it reached 6.92 percent.
The MBA's seasonally adjusted purchase mortgage index fell 6.2 percent to 389.0.
The purchase index, which is considered a timely gauge of U.S. home sales, was substantially below its year-ago level of 477.4.
The group's seasonally adjusted index of refinancing applications decreased 7.5 percent to 1,356.0. A year earlier the index stood at 2,529.2.
The refinance share of applications decreased to 35.3 percent from 35.5 percent the previous week.
Fixed 15-year mortgage rates averaged 6.49 percent, up from 6.37 percent the previous week. Rates on one-year adjustable-rate mortgages (ARMs) increased to 6.36 percent from 6.22 percent.
The ARM share of activity decreased to 29.1 percent of total applications from 29.6 percent the previous week.
Historically low mortgage rates have fueled a five-year housing boom, helping support the U.S. economy's recovery from recession despite uncertain business investment.
While analysts differ on whether or not there is a housing bubble, most agree that the market is cooling off from its record run.
The MBA's soft data followed separate reports this week showing a mixed picture of the U.S. housing sector.
The National Association of Realtors on Tuesday said the pace of sales of existing homes in the United States fell 1.2 percent in May as higher interest rates damped buying activity in May but were a shade above market forecasts.
Sales of existing U.S. homes fell to a seasonally adjusted annualized rate of 6.67 million units in May from a downwardly revised level of 6.75 million in April. May's rate was 6.6 percent below the pace of 7.14 million units a year earlier.
The Commerce Department on Monday said sales of new single-family U.S. homes again defied predictions of a slowdown in May and rose 4.6 percent.
The pace of new home sales rose to a seasonally adjusted 1.234 million-unit annual rate from a downwardly revised 1.180 million unit pace in April, the Commerce Department said.
The MBA's survey covers about 50 percent of all U.S. retail residential mortgage loans. Respondents include mortgage bankers, commercial banks and thrifts.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox