FX.co ★ US Mortgage Applications Fall Most in 2 Months

Mortgage applications in the US fell 8.3% in the third week of May, deepening the previous week’s 2.3% decline and marking the steepest drop in nearly two months, according to data from the Mortgage Bankers Association. The decrease coincided with a fresh rise in borrowing costs, as the benchmark 30-year mortgage rate climbed to a nine-month high of 6.65%. That increase followed a jump in some long-term Treasury yields to their highest levels since 2007, driven by pro-inflationary risks stemming from the war in the Middle East. Refinancing activity, which is typically more sensitive to short-term interest rate moves, tumbled 18.1% from the prior week, while applications for home purchase mortgages edged down 0.4%.