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The
average contract rate on a 30-year fixed-rate mortgage increased
to 5.53% in the week ended May 6 from 5.36% a week earlier, the
MBA survey showed.
It has now risen 242 basis points from 12 months ago, the
sharpest rise in decades, as the U.S. Federal Reserve tightens
financial conditions to try to dampen demand across the economy
as it battles a 40-year-high inflation rate.
The housing market, flashing signs of overheating over the past
two years, is seen as a particularly rate-sensitive sector and
Fed policymakers are keen to sap some of its current double
digit annual price growth.
Whether they can cool the market as much as they hope remains to
be seen, with price growth fueled by record-low housing stock,
unusually high household savings, an extremely tight job market
and increased worker mobility.
Mortgage applications rose last week for the second week in a
row. The MBA said its Purchase Composite Index, a measure of all
mortgage loan applications for purchase of a single family home,
increased 4.5% from a week earlier. However, this was still
below the levels seen just a month ago and almost 8% lower than
the same week one year ago.
(Reporting by Lindsay Dunsmuir; Editing by Mark Heinrich)
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