Weekly U.S. mortgage refinancing activity dropped last week to its lowest since June as home borrowing costs increasing to their most expensive level in about three months, the Mortgage Bankers Association stated on Wednesday. The trade group’s seasonally adjusted index on refinancing activity dropped 8 percent in the week ended Sept. 16 to its lowest level since the week of June 24. The median contract interest rate on 30-year fixed-rate mortgages with conforming loan balances of $417,000 or less jumped to 3.70 percent, which was its highest since 3.75 percent in the week ended June 24, the Washington-based group stated.
Temporarily, MBA’s seasonal adjusted index on applications for loans to buy a home, which is seen as a gauge on future housing activity, dropped 7 percent from a week earlier. This week’s domestic housing data were mixed. The government said on Tuesday housing starts dropped more than anticipated by 5.8 percent to an annualized 1.14 million units in August. Analysts liable for the decline on the flooding in Texas and Louisiana, which trimmed into construction in the South.
Also, the National Association of Home Builders and Wells Fargo reported on Monday their index on their members’ confidence advanced to 65 points in September, matching its strongest level since October 2015. This compared with a downwardly revised 59 in August. The MBA’s index on overall mortgage activity dropped 7.3 percent on a seasonally adjusted basis from a week earlier. The refinance share of mortgage activity advanced to 63.1 percent last week, compared with 62.9 percent the previous week.