U.S. Home Mortgage and Refinancing Applications Plunge Last Week

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U.S. Home Mortgage and Refinancing Applications Plunge Last WeekU.S. home mortgage applications dropped last week while applications for refinancing also declined, reported the Mortgage Bankers Association.

The MBA’s index of mortgage application activity, which tracks both home purchase demand and refinancing, plunged 7.3 percent for the week through Nov. 28.

The seasonally-adjusted gauge of applications for refinancing dropped 13.4 percent, while the index of mortgage applications, a key indicator of home sales, advanced 2.5 percent.

The rates for the 30-year fixed mortgage stood at 4.08 percent on average last week, its weakest level since May 2013. The rates plunged seven basis points or 0.07 percentage points from 4.15 percent a week earlier.

The MBA survey tracks at least 75 percent of all U.S. refinancing and home mortgage applications.

Meanwhile, the U.S. services industry grew more than forecasted in November despite a drop in the employment index. The Institute for Supply Management reported that its services gauge increased to 59.3 last month. This is near the post-recession peak of 59.6 that was touched in August, and compares favorably against October’s reading of 57.1.

Economists surveyed by Reuters had expected a reading of 57.5. A measure exceeding 50 shows that economic activity expanded. Two out of the ten constituents of the poll, imports and employment, dropped from October, though they still stood above the 50 mark.

The component of business activity increased to 64.4 compared with October’s figure of 60, while the new orders gauge rose to 61.4 from 59.1. The prices paid component increased to 54.4 in November, compared with October’s reading of 52.1. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com