U.S. Mortgage Applications Tumble to a 13-Year Low

WASHINGTON (AP) -- The number of Americans applying for mortgages has fallen 63% since a May peak, reflecting a cooling housing market and higher borrowing rates.

The Mortgage Bankers Association says applications fell a seasonally adjusted 6.3% last week from a week earlier. Applications are now at a 13-year low.

The drop-off follows a 1-percentage-point increase in mortgage rates from historic lows last spring. The average for a 30-year mortgage is 4.47%, according to mortgage buyer Freddie Mac.

Home sales stalled and began to fall once rates steadily increased after May. That ended a year and a half of rising mortgage applications since the housing bust.

Higher borrowing costs have made homes less affordable. Rates could rise further as the Federal Reserve scales back its economic stimulus.

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