As interest rates rise, new mortgage applications continue to
fall. That's no big surprise. Consumers quickly become uneasy about higher interest rates. The Mortgage Bankers Association reported that mortgage
applications to buy a home fell for a second week in a row by 2.5%. Refinance applications fell 0.4% to the
second lowest level in a year. The
average rate for a 30-year fixed-rate mortgage hit its highest level in almost 4 years, since the week ended June 7,
2002. The rate climbed to 6.56%, up from 6.5% a week earlier.
The good news for the economy is that as housing cools it will ease economic growth in the second quarter, which should slow inflation. That ultimately will make it easier for the Fed to halt its drive to raise interest rates.
1. Housing's cooling, and that should take the edge off of economic growth in the second quarter
Posted at 10:32AM on Apr 20th 2006 by Mort