This week mortgage applications decreased 8.8% for the third week in a row. One possible reason for this decrease might be the rise in mortgage rates as well as home prices in the US.
Home prices have increased 10.9% within the last 12 months since March 2012, which is above the estimated increase of 10.2%. This increase in house prices is the largest we've seen since 2006.
Consumer confidence has also increased this month to the highest level since 5 years ago, with consumers becoming more confident due to positive views of the economy.
According to Freddie Mac, 30-year fixed-rate mortgages increased from 3.59% last week to 3.81% this week, reaching their highest level this year.
15-year fixed-rate mortgages also jumped to 2.98% this week from 2.77% the previous week, which is also the highest rate we have seen this year.
5-year adjustable-rate mortgages also increased slightly from 2.63% last week to 2.66% this week.
1-year adjustable-rate mortgages are the only ones that have decreased their rates, from 2.55% last week to 2.54% this week, which is only 0.01% above the record low mortgage rate level of 2.53%.
The refinance share of all mortgage activity decreased this week to 71% compared to 74% last week, which is the lowest refinance share of activity we've seen since April 2012. The adjustable-rate mortgage share of activity increased 5%.