(MBA) The refinancing index for US home mortgages fell by 9.9% in the week to April 1 to reach 1,166.3 as the mortgage rates increased.
The fall in refinancing was also accompanied by a decline in mortgage applications which slipped by 6.3% to a three-year low.
The mortgage Purchase Index fell by 3% from the prior week to maintain levels 9% below the same period of last year.
The falling mortgage applications and refinancing happened at a time the average contract rate on the 30-year fixed mortgage rate surged by 10 basis points to 4.9%. The rate has increased by 1.07% in the last two months.
The effective rate on the 30-year mortgage, which takes into account the effects of compounding, reached 5.06%, the highest since late 2018.
MBA associate vice president Joel Kan says mortgage applications continue to fall as mortgage rates rise, while markets also anticipate a tighter monetary policy in the coming months.
Mortgage refinancing now comprises up to 38.8% of all mortgage applications, a decline from 60% in the prior year. The refinancing is the lowest since May 2019.
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