Mortgage applications hit 4-year low as interest rates rise

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Mortgage rates hit 7-year high, crimping home sales

"The economy continued to show resilience as strong business activity and growth in employment drove the 30-year fixed mortgage rate to a seven year high of 4.94 percent - up 11 basis points from last week", said Sam Khater, chief economist of Freddie Mac.

Mortgage loan rates for top-tier borrowers increased last week from a prior week's ending value of 4.94% to 5.04% for a 30-year fixed-rate loan, according to Mortgage News Daily.

US mortgage rates jumped this week to the highest level in seven years, a trend that's pulling down home sales and slowing home price growth. The annual rate of home sales has declined 15.3 percent since May. The Fed announced today that it's holding its benchmark federal funds rate in a range of 2 percent to 2.25 percent. It was the eighth hike since policymakers started to normalize monetary policy in late 2015.

Freddie Mac says home price increases are slowing as a result, particularly in higher-priced coastal cities.

Higher rates have kept many would-be home purchasers on the sidelines.

Sales of existing homes haven't fared any better, falling for six straight months.

The Federal Reserve has been raising short-term rates to cool USA economic expansion, and is expected to raise rates for a fourth time this year in December. A year ago the 10-year note yielded 2.32%.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.14 percent with an average 0.3 point, up from last week when it averaged 4.04 percent. The fee on 15-year mortgages ticked up by one-tenth to 0.5 point.

According to the MBA, last week's average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 5.11% to 5.15%. The fee remained at 0.3 points.

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