iBankCoin
Joined Nov 11, 2007
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Worries of Tapering Send Mortgage Rates Through the Roof, Refinancing Begins to Fall

“Worries the Federal Reserve may begin to slow its stimulus efforts sent mortgage rates last week to their highest level in a year, drying up demand for home refinancings, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said interest rates on fixed 30-year mortgage rates surged 12 basis points to average 3.9 percent in the week ended May 24. It was the highest level since May 2012 and the biggest jump in 14 months.

The rise sent the seasonally adjusted index of mortgage application activity down 8.8 percent as refinancing applications tumbled 12.3 percent. It was the biggest drop in refinance applications this year as demand fell to the lowest level since December.

The refinance share of total mortgage activity decreased to 71 percent of applications from 74 percent the week before.

Still, the gauge of loan requests for home purchases, a leading indicator of home sales, rose 2.6 percent, suggesting potential homeowners may have sought to lock in a still-low rate….”

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