Mortgage applications fall as rates rise to the highest level in 16 years

The numbers: Mortgage applications fell 2% this week, as rates continue to inch higher, adding hundreds of dollars in costs to potential homebuyers.That weighed down the market composite index, a measure of mortgage application volume, the Mortgage Bankers Association said on Wednesday.

The big picture: Mortgage application activity — which includes purchases and refinances — has dropped to the slowest pace since December 1999, the MBA said.Mortgage rates are at the highest level since 2006. How that affects home buyers: With a $2,000 average monthly payment, a buyer would’ve been able to afford roughly a $500,000 home a year ago with the 30-year at 3.18% and with 20% down.Key details: The refinance index plunged by 1.8%, and was down 86% compared to a year ago.

The adjustable-rate mortgage share of activity fell to 11.7% of total applications, but that’s still “quite high,” Fratantoni said.

So those no credit check credit lines didn’t attract anyone? Who woulda thunk.

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