The number of mortgage applications in the United States dropped for the third week in January, with the Market Composite Index at nearly 12 percent compared to the previous week, according to a Mortgage Bankers Association (MBA) report.
The decline this month is the most significant since 2008. Applications for mortgage loans and refinancing plummeted, attributed to the high unemployment rate and increase in interest rates.
Many home buyers are hesitant to apply, due to possible unemployment or uncertainty of the future. Potential buyers, hearing of foreclosures and job losses, are hesitant to make any financial commitment.
In recent years, when mortgage rates were at their lowest, home owners turned to refinancing as a practical option. However, in light of the increasing rates, such behaviour has lessened.