Mortgage demand drops as rates climb

By Reuters
Posted Dec. 1, 2010 at 6:04 a.m.

Applications for U.S. home mortgages dropped last week as interest rates rose to the highest level since mid-August, driving down applications for refinancing, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 16.5 percent to 608.8 in the week ended Nov. 26.

Refinancing applications plunged 21.6 percent to a reading of 2,974.4 on the seasonally adjusted index, the lowest reading since early June.

Requests for home purchases gained 1.1 percent to 207.2.

Fixed 30-year mortgage rates averaged 4.56 percent in the week, up from 4.50 percent in the previous week and the highest since the week ending Aug. 13.

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