U.S. mortgage applications declined from an 11-month high last week as home borrowing costs increased in the wake of encouraging domestic economic data, the Mortgage Bankers Association said on Wednesday.
The Washington-based industry group said its seasonally adjusted barometer on requests for loans to buy a home and to refinance one fell 2.7 percent to 400.6 in the week ended Jan. 18. A week earlier, it reached 411.8, the highest reading since February 2018.
"Mortgage application activity cooled off last week after two consecutive weeks of sizeable increases. Both purchase and refinance applications saw declines but remained at healthy levels, with the purchase index remaining close to a nine-year high, and the refinance index hovering near its highest level since last spring," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.
"Reversing the recent downward trend, rates increased for most loan types last week, due to better-than-expected unemployment claims, easing trade tensions and stabilization in the equity markets."
The refinance share of mortgage activity decreased to 44.5 percent of total applications from 46.8 percent the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.75 percent from 4.74 percent.
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