An index of mortgage applications in the US fell last week as rising mortgage rates hurt refinancing, while a looming deadline for a homebuyers’ tax credit boosted purchases for a fifth time in six weeks.
By Bob Willis
Bloomberg
An index of mortgage applications in the U.S. fell last week as rising mortgage rates hurt refinancing, while a looming deadline for a homebuyers’ tax credit boosted purchases for a fifth time in six weeks.
The Mortgage Bankers Association’s index decreased 2.9 percent in the week ended April 23. The Washington-based group’s refinance measure fell 8.8 percent, while the gauge of purchases climbed 7.4 percent to the highest level since October, the month before the tax credit was initially due to lapse.
“We’re going to see some mortgage demand, with buyers taking advantage of the tax credit,” Robert Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh, said before the report. “We’ll see some weak demand on the back side” after the tax credit expires.
The government incentive is bringing buyers into the market ahead of the deadline for signing contracts at the end of the month. Any further increase in housing demand after the credit ends may depend on gains in employment as a growing economy pushes up borrowing costs.