Higher mortgage rates are causing a slow down in the mortgage industry as experts have expected. The hot economy raising interest rates combined with parts of the country coming out of a housing bubble are all part of the slow down that has been expected in real estate sales. That combined with mortgage rates that are the highest in 3 years have caused the slowdown.
The Mortgage Bankers Association’s index of applications to buy a home or refinance an existing mortgage declined 5.5 percent to 579.4 from 612.8 a week earlier. The gauge of applications to purchase homes dropped 4.7 percent to 417.7.
Higher mortgage rates and a decline in speculative purchases may cause home sales to fall this year for the first time since 2000, said Anthony Chan, chief economist at JPMorgan Chase & Co.’s private client services group in Columbus, Ohio.
“The housing market is clearly slowing down,” Chan said before the report. “Now that the mortgage rates are going up, you may see people getting really, really scared.”
