Sensitivity of Housing Activity to Changing Rates
U.S. mortgage applications, a key indicator of housing activity, rose substantially over the past two years due to decreasing mortgage rates engineered by the Federal Reserve. However, since the start of 2013, mortgage rates have begun to climb as economic activity has picked up. As a result, mortgage applications in the first quarter were 5% lower than in the previous quarter. With rates continuing to climb substantially over the past month, there may be headwinds for mortgage applications and housing sales in the coming months.
QUARTERLY CHANGE IN MORTGAGE RATES AND MORTGAGE APPLICATIONS