Mortgage applications dropped a full 5% last week from the week before, according to the Mortgage Bankers Association, which blamed the drop on “spiking” interest rates since mid July.
Also, according to Housing Wire,
The refinance index and the seasonally adjusted purchase index fell 5.5% and 3.8%, respectively, from a week ago, while the unadjusted purchase index declined 3.4%.
(Refinancing, in fact, made up almost 70% of all mortgage applications.)
One likely culprit: The potential for the U.S. to default on its debt. An actual default would cause interest rates to skyrocket, but the looming potential may be enough to start the process.