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Mortgage refi activity takes another big hit

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The jump in mortgage rates since early November continues to take a heavy toll on refinancing activity, as the math no longer works for many homeowners.

The Mortgage Bankers Assn. said Wednesday that its seasonally adjusted index of new refi applications plunged 24.6% last week compared with the previous week, the sixth straight weekly decline.

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That left the index at its lowest level since April 30.

The average 30-year mortgage rate (charted at left) hit 4.83% last week, up from a low of 4.17% in early November, as longer-term interest rates in general have surged with the improving economy.

Loan applications for home purchases also fell last week, but modestly: They were down 2.5% from the previous week, the second straight drop. But the volume of purchase applications still is about 20% above its low for the year reached in early July.

Previously owned homes sold at a seasonally adjusted annual rate of 4.68 million units in November, up 5.6% from October’s pace, the National Assn. of Realtors reported Wednesday.

Sales of existing homes are crawling higher after crashing in summer, following the spring sales boost that was fueled by the now-expired federal tax credit for buyers.

There may be some short-term relief for mortgage rates: The yield on the 10-year Treasury note, a benchmark for home-loan rates, has pulled back to about 3.35% after reaching a seven-month high of 3.53% last week.

-- Tom Petruno

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