WASHINGTON–A spike in mortgage rates following the election of Donald Trump as president has led to fewer people applying for new home loans.
According to the Mortgage Bankers Association, mortgage application volume fell 9.2% last week compared to the previous week. That decline comes at the same time the average 30-year fixed-rate mortgage increased to 3.95% from 3.77%,
”Following the election, mortgage rates saw their biggest week over week increase since the taper tantrum in June 2013, and reached their highest level since January of this year," said David Stevens, president and CEO of the Mortgage Bankers Association, in a statement. “Investor expectations of faster growth and higher inflation are driving the jump up in rates, and rates have now increased for five of the past six weeks, spurring a commensurate drop in refinance activity."
Loan refi’s also declined 11% last week compared to the previous week.
“It is no surprise that refinance volume has fallen, as the long boom has meant that there are fewer borrowers with any incentive to refi," said Stevens. “