Published: Sun, November 11, 2018
Finance | By Loren Pratt

Pressures rise for homebuilders as rates hit 7-year high | AP business

Pressures rise for homebuilders as rates hit 7-year high | AP business

Mortgage rates have risen along with the yield on the 10-year note, which has jumped in the past year on expectations of additional short-term rate increases by the Federal Reserve, faster economic growth and potentially higher inflation.

For the week ending November 2, the Market Composite Index fell by four percent on a seasonally adjusted basis from one week earlier to its lowest level since December 2014.

MBA's seasonally adjusted gauge on purchase mortgages fell 5 percent to 213.6, the lowest in two years.

The average rate for five-year adjustable-rate mortgages rose to 4.14 per cent from 4.04 per cent last week. As of Tuesday night, top-tier borrowers are looking at a rate of 5.05%.

The yield on the 10-year reached 3.23 percent Thursday, up almost a full percentage point from 2.33 percent a year ago. While interest rates held steady this month, an increase is anticipated in December. The unadjusted Purchase Index was down by one percent compared to the previous week and was 0.2 percent lower than the same week one year ago. The survey's contract rate on a 30-year fixed loan rose to 5.15 percent from 5.11 percent.

"It's evident that housing inventory shortages continue to impact prospective homebuyers this fall", Kan said.

The MBA's refinance index decreased by 3% week over week, and the percentage of all new applications that were seeking refinancing decreased from 39.4% to 39.1%. That was the highest for the popular loan product since February, 2011.

The average fee on 30-year fixed-rate mortgages was unchanged from last week at 0.5 point.

The survey also showed that 15-year FRM this week averaged 4.33 percent, while the reading was 3.24 percent a year ago.

New York City co-op boards thinking about refinancing their underlying mortgages aren't the only ones keeping an eye on interest rates.

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