Mortgage applications decreased 7.2 percent from a week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 5.
The Market Composite Index - a measure of mortgage loan application volume - decreased 7.2 percent on a seasonally adjusted basis from one week earlier, to the lowest level since December 2000.
On an unadjusted basis, the Index decreased 17 percent compared with the previous week.
The Refinance Index decreased 11 percent from the previous week, to the lowest level since November 2008, while the refinance share of mortgage activity decreased to 55 percent of total applications from 57 percent the previous week.
As interest rates begin to rise, US mortgage lending is being stifled, particularly in the refinance segment which peaked earlier in the year.
Last month, Australian mortgage industry stalwart Kym Dalton explained how the local lending market could go down a similar path to the US as rates hit record-lows.
“Australia is now a yield economy, and Australian banks are able to borrow very efficaciously offshore,” Mr Dalton told Mortgage Business, adding that he expects rates to drop even further before stopping suddenly as they did in the US.
“It will be a race to the bottom,” he said.
“In the US, as rates plummeted brokers and bankers never had it so good because everyone refinanced down to historically low rates.
“That stopped dead in March and now everyone is in the doldrums because rates are about to tick up.
“There is no activity in the US at all at the moment.”