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Mortgage rates have more than doubled since the beginning of the
year as the Federal Reserve pursues an aggressive path of
interest rate hikes to bring down stubbornly high inflation.
Those actions, designed to cool the economy sufficiently to curb
price pressures, have weighed heavily on the
interest-rate-sensitive housing sector as expectations for Fed
tightening have led to a surge in Treasury yields. The yield on
the 10-year note acts as a benchmark for mortgage rates.
The average contract rate on a 30-year fixed-rate mortgage rose
by 6 basis points to 6.81% for the week ended Oct. 7 while the
MBA's Market Composite Index, a measure of mortgage loan
application volume, fell 2.0% from a week earlier and is down
roughly 69% from one year ago.
Its Purchase Index, a measure of all mortgage loan applications
for purchase of a single family home, fell 2.1% from the prior
week and is 39% lower than a year ago, while MBA's refinance
Index declined 1.8% last week and is down 86% from one year ago.
Homebuilding and sales have weakened significantly in recent
months, with home resales posting seven straight months of
declines. However, home prices remain high even as house price
growth slows, eroding affordability for buyers who are still
competing due to a shortage of properties for sale.
(Reporting by Lindsay Dunsmuir; Editing by Bernadette Baum)
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