Mortgage Applications Plunge as Rates Rise and Fed Prepares To Hike

Mortgage applications fell this past week as concerns over inflation and an expected Federal Reserve interest rate hike put a chill on the market, according to the Mortgage Bankers Association.For the week ending Sept. 11, MBA's Market Composite Index—a measure of total mortgage loan application volume—fell 4.1% on a seasonally adjusted basis from one week earlier.The seasonally adjusted Purchase Index, which measures the volume of mortgage applications to purchase a single-family home, decreased 1% from one week earlier. Purchase applications were down a staggering 19% from a year ago.Mortgage applications have been on a steady downward trajectory for months as interest rates climbed toward 7%. Bond market turmoil is driving rates higher, as investors eye inflation data and await the Fed's next move.Many believe Fed Chairman Kevin Warsh and the rest of the Federal Open Market Committee will raise the Fed's benchmark interest rate by a quarter point to stabilize prices and slow inflation.If this happens, it would be the first rate hike since 2023, and it would put Warsh at odds with President Donald Trump. Trump has repeatedly argued that interest rates should be lowered. On Sunday...