By Vince Golle | Bloomberg
A measure of US mortgage applications stumbled to an almost three-decade low as borrowing costs increased for a sixth-straight week, indicating further downside momentum for a battered housing market.
The Mortgage Bankers Association’s overall index of applications to purchase or refinance a home slumped 6.9% in the week ended Oct. 13 to 166.9. That was the weakest reading since May 1995.
The contract rate on a 30-year fixed mortgage edged up 3 basis points to 7.7%, marking the sixth-straight weekly advance, data out Wednesday showed. The rate on a five-year adjustable mortgage jumped 19 basis points to 6.52%, the second-highest in MBA data back to 2011.
The index of home-purchase applications slid more than 5% to the lowest level since 1995, while the refinancing gauge fell by the most since February.
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Mortgage rates tend to move in tandem with Treasury yields. The 10-year note yield rebounded Tuesday to the highest since 2007 after robust economic data indicated the Federal Reserve may have to boost interest rates again.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.