There Is Now No Doubt That Rising Mortgage Rates Are Hitting The Housing Market

It’s becoming very clear that rising mortgage rates are having a material impact on the housing a market.

The Mortgage Bankers Association’s (MBA) latest weekly survey of mortgage applications showed plunging numbers across the board.

Mortgage applications for the week ending September 6 fell 13.5% from a week ago. This is a five-week low.

Refinancing activity plunged 20% to its lowest level since June 2009.

The average 30-year conforming fixed mortgage rate ($417,000 or less) climbed to 4.80% from 4.73% a week ago.

The average 30-year fixed mortgage rate with jumbo loans climbed to 4.84% from 4.71% a week ago.

“Housing is not the economic tailwind it used to be,” said fund manager Jeffrey Gundlach in a webcast on Tuesday evening.

Gundlach pointed to the current downtrend in the MBA mortgage index. But more importantly, he noted that the index never really rebounded with all of the other major housing indicators.

Interest rates began to rise in May when the Federal Reserve said it could soon taper its monthly purchases of $US45 billion worth of Treasury securities and $US40 billion worth of mortgage backed bonds.

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