A very modest 10bps rise in 30Y mortgage rates over the last few weeks has crushed the housing market's refinance boom, and hit the new home application side too.
Overall mortgage applications tumbled 10.1% last week - the most since the Xmas holiday week in 2016. This is actually the biggest drop for this time of year in at least 10 years.
The drop was led by a 15.2% plunge in refinance applications, with new purchase applications also down 3.3%.
Mortgage rates are up a mere 10bps - and remain near 3-year lows - but still the marginal mortgage applicant has backed away dramatically...
But that move has killed the entire refinance boom...
All of which should make housing market enthusiasts more than a little worried, as if the marginal mortgage applicant is this sensitive to rates - near record lows - then what happens if we see an upturn in growth (which is apparently priced into homebuilder stocks) and rates really rise?