Mortgage applications plummet
Industry group says activity sank by 13.7% last week as interest rates inched higher and tax credit expiration drew nearer.
| Downpayment: | $ | |
| Interest rate: | % | |
| Yearly property taxes: | $ | |
| Yearly homeowner's insurance: | $ | |
 |
||
| 30 yr fixed mtg | 5.03% |
| 15 yr fixed mtg | 4.51% |
| 30 yr fixed jumbo mtg | 5.86% |
| 5/1 ARM | 4.38% |
| 5/1 jumbo ARM | 4.89% |
NEW YORK (CNNMoney.com) -- Mortgage applications plunged last week as rates ticked higher above 5%, an industry group said Wednesday, as the expiration of a home buyer tax credit drew nearer.
The Mortgage Bankers Association said its index of mortgage application volume fell 13.7% in the week ended Oct. 16 from the prior week.
The decline in activity came as rates on the widely-used 30-year fixed mortgage increased to 5.07% from 5.02%, according to the MBA. The week's adjustments included the Columbus Day holiday.
Uncertainty about a possible extension and expansion of an $8,000 tax credit for first-time homebuyers may be hampering the housing recovery. The tax credit now can be claimed by anyone buying a home who has not owned one for three years and who closes the deal by Nov. 30.
The MBA said refinancing applications also fell, by 16.8% from the previous week. The purchase index, a measure of applications at mortgage lenders, declined 16.7% last week.
The MBA's Wednesday report comes on the heels of other downbeat data from the U.S. housing market, which had until recently showed signs of stabilization from a major slump.
A report Tuesday showed initial construction of homes rose just 0.5% last month to 590,000, far less than expected. Last week, data showed foreclosure filings hit a record high in the third quarter. Another report predicted the national median home price will drop 11.3% by June 2010.
The MBA report also showed the average rate for 15-year fixed-rate mortgages rose to 4.51% from 4.44%.
Rates for one-year adjustable rate mortgages, or ARMs, jumped to 6.86% from 6.71%. 
