Mortgage applications drop over holiday week

With interest rates trending up, applications have been suffering.

According to the Mortgage Bankers Association (MBA), total mortgage application volume fell 7.6 percent week over week on a seasonally adjusted basis last week. The MBA further adjusted the outcome to account for the Memorial Day holiday last Monday.

Refinancing took the biggest hit, dropping 12 percent to its lowest level in over a year. Volume for those applications was down 1 percent year over year, a sharp contrast from last week, when it was up 8 percent in the same category.

For the total amount of mortgage activity, refinancing dropped 2 percent from last week to 49 percent of all applications, its lowest share since last May.

Home sales performed slightly better last week. While they did drop 3 percent week over week, mortgage applications were up 14 percent from the same week last year. CNBC reports that while sales aren't as high as some experts had predicted, the lower numbers are attributed to fewer properties on the market as opposed to interest rates rising.

"For the average American across the country … it's really tough to buy a home. Homes are in short supply and we haven't seen production come back," Lennar CEO Stuart Miller said on CNBC's Squawk Box.

Miller went on to say that the delayed entry of Millennials into the housing market is also a factor. Traditionally, people in their 20s who moved back home only stayed there for a year. With those people living at home longer, the housing market has been slow to recover.

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