Mortgage Applications Down on Rising Rates

Washington, DC, Dec. 22, 2010 -- Mortgage application volume fell to its lowest level in nearly a year as rising interest rates took a significant toll on demand, according to the Mortgage Bankers Association.

MBA said its index of mortgage applications for the week ended December 17 decreased 18.6%, reaching its lowest level since the week ended January 1.

The MBA's seasonally adjusted index of refinancing applications decreased 24.6%, reaching its lowest level since the week ended April 30.

"Refinance application volume dropped sharply this week as mortgage rates held near six month highs," Michael Fratantoni, MBA's vice president of research and economics, said in a press release.

"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," he said.

Rates for 30-year fixed rate mortages averaged 4.85%, up 0.01 percentage point from the previous week. 

The MBA said fixed 15-year mortgage rates averaged 4.22%, up from the previous week's 4.21%.