Higher Rates Letting The Air Out

This from Reuters:

U.S. mortgage applications fell last week as interest rates on 30-year home loans reached their highest since early April, according to data by an industry group.

"Our sense is that the housing market slowdown may finally be approaching," said Jan Hatzius, economist at Goldman Sachs.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended Sept. 30 slipped 1.1 percent to 713.5, its lowest level since late May.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.94 percent last week, up from 5.85 percent the previous week. The average 30-year rate reached its highest level since the week ended April 8 when it was 5.95 percent.

The MBA's seasonally adjusted purchase mortgage index fell 1.9 percent. The index, considered a timely gauge on U.S. home sales, was down for a third straight week to its lowest level since the last week of August.

Meanwhile, the National Association of Realtors said pending sales of existing homes hit a record in August, indicating strength in the housing sector before Hurricane Katrina and the latest tick up in mortgage rates.

The Pending Home Sales Index for August hit 129.5, up 3.2 percent from July and 4.7 percent higher than a year ago.

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— The Boy in the Big Housing Bubble