The interest rate on US mortgage loans jumped last week by the most in 11 years as bond market investors repositioned for the Fed to take aggressive action to control inflation.
- The Mortgage Banks Association (MBA) stated the contract rate on a 30-year fixed-rate mortgage increased to 4.8% in the week ended March 25 from 4.5% a week earlier.
- Mortgage rates have now jumped by almost 1.5 percentage points since the start of the year, the most rapid surge in home borrowing costs since 1994.
- With mortgage rates climbing rapidly, mortgage application activity has plunged sharply in recent weeks.
- The MBA stated that its Market Composite Index, a measure of mortgage loan application volume, sank 6.8% on a seasonally adjusted basis to 425.1, the lowest level since December 2019.
The refinance index plunged 14.9% to the lowest since May 2019 as the purchase index was largely unchanged.
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