Mortgage applications in the US have dropped to its lowest level in nearly a year, as a series of interest rate increases took a significant toll on demand, according to the Mortgage Bankers Association (MBA).
The industry group said the seasonally-adjusted mortgage application index dropped 18.6 percent, hitting the lowest level since January. Average mortgage applications for four weeks also declined 9.8 percent.
The decline in demand last week was attributed to a lack of interest by home owners to refinance their existing mortgages.
A 24.6 percent decline has also been recorded in the MBA’s seasonally adjusted refinancing applications index, setting the lowest record since April this year.
“Refinance application volume dropped sharply this week as mortgage rates held near six month highs,” said Michael Fratantoni, vice president of research and economics at the MBA.
“Purchase applications fell for a second week, with the level of applications little changed over the past month, indicating that home sales are likely to remain relatively weak over the next few months,” said Mr. Fratantoni.