A measure of U.S. mortgage application activity decreased for a second week to a five-month low as 30-year mortgage rates rose to their highest since June, data from the Mortgage Bankers Association released on Wednesday showed.
Mortgage activity is a great predictor of the housing market, which seems to be in good health.
The 30-year fixed-rate mortgage yield rose by just 5bps through last weekend to 3.84%.
Mortgage rates in the U.S. declined, keeping borrowing costs at the lowest levels since May 2013.
Lenders are continuing to tighten the credit vise on homebuyers after five straight years of economic expansion, imposing the toughest standards since at least 1998.
Fannie Mae fell 1 percent to $2.95 at 9:35 a.m. in New York, after dropping 25 percent from mid-August through last week. Freddie Mac slipped 2 percent today.
Wells Fargo & Co., the largest U.S. home lender, agreed to pay Fannie Mae $591 million to resolve repurchase demands on loans originated before 2009 and sold to the government-backed firm.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said banks will have to charge more for lending to get a “fair return” as regulators require the industry to set aside more funds to cushion against losses.
Purchases of new U.S. homes rebounded in October from the lowest level in more than a year, signaling buyers are starting to take higher mortgage rates in stride.
Purchases of foreclosed homes at auctions jumped last month as banks benefited from surging prices and shunned approvals of sales by homeowners dumping their dwellings at a loss.