US mortgage applications drop 0.8% week-on-week
Mortgage applications decreased 0.8% in the week ended 2 September, according to the Mortgage Bankers Association of America.
The refinance index slipped 1% from the previous week and 83% when compared to the same week a year earlier, while the seasonally adjusted purchase index decreased 1% week-on-week.
The report revealed that the refinance share of mortgage activity increased to 30.7% of total applications, up from 30.3% in the previous week, while the adjustable-rate mortgage share of activity remained unchanged at 8.5% of total applications.
Average contract interest rates for 30-year fixed-rate mortgages with conforming loan balances increased to 5.94% from 5.80%.
MBA chief economist Mike Fratantoni said: "Mortgage rates moved higher over the course of last week as markets continued to re-assess the prospects for the economy and the path of monetary policy, with expectations for short-term rates to move and stay higher for longer.
"With the 30-year fixed rate rising to the highest level since mid-June, application volumes for both purchase and refinance loans dropped. Recent economic data will likely prevent any significant decline in mortgage rates in the near term, but the strong job market depicted in the August data should support housing demand. There is no sign of a rebound in purchase applications yet, but the robust job market and an increase in housing inventories should lead to an eventual increase in purchase activity."
Reporting by Iain Gilbert at Sharecast.com