WASHINGTON – The number of Americans applying for mortgages has fallen 63 percent since a May peak, reflecting a cooling housing market and higher borrowing rates.
The Mortgage Bankers Association says applications fell a seasonally adjusted 6.3 percent last week from a week earlier. Applications are now at a 13-year low.
The drop-off follows a 1 percentage point increase in mortgage rates from historic lows last spring. The average for a 30-year mortgage is 4.47 percent, according to mortgage buyer Freddie Mac.
Home sales stalled and began to fall once rates steadily increased after May. That ended a year and a half of rising mortgage applications since the housing bust.
Higher borrowing costs have made homes less affordable. Rates could rise further as the Federal Reserve scales back its economic stimulus.