Applications for mortgages dipped last week as interest rates climbed and the housing market cooled.
Overall, mortgage applications fell 0.8 percent to 567.6 last week from 571.9 the week before, according to the Mortgage Bankers Association. Purchase applications were unchanged from a week ago, while applications to refinance dropped 2.2 percent.
New homebuyers stalled out last week, and house purchases are down 22 percent from their peak last June. Some analysts suggest that homebuyers moved up their purchases in anticipation of further rate hikes in coming weeks. If so, that could mean worse numbers in the weeks ahead.
The Fed is signaling a rate hike when it meets next week. The jury is still out on future rate hikes.
Refinancings have cratered 43 percent since last year. That's because rates have gone nowhere but straight up. The average rate for a 30-year fixed mortgage was 6.73 percent, the highest since May 2002 says Bloomberg News.
Falling interest rates and rising home prices allowed homeowners to cash out the equity in their homes by refinancing. That extra cash, in turn, gave them the means to fuel a consumer-spending spree to strengthen the economy. So now, not only do we now face a possible real estate crash, but we also may face an economic slowdown.
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