The Huffington Post | By Mark Gongloff
A jump in interest rates has had a big impact on the housing market. That’s a warning sign for a Federal Reserve seemingly bound and determined to withdraw stimulus from a still-shaky economy.
The mortgage market cratered in the fourth quarter of 2013, Wells Fargo and JPMorgan Chase reported on Tuesday, as higher interest rates all but murdered demand for mortgage refinancing.
The nation’s biggest mortgage lender, Wells Fargo, said its mortgage volume tumbled to $50 billion in the quarter, down 60 percent from $125 billion a year ago. The second-biggest lender, JPMorgan Chase, said its mortgage originations, that includes new home purchases and refinancings, fell 54 percent to $23.3 billion from $51.2 billion a year ago.
These two banks are key indicators for the state of the housing market. Wells Fargo issued nearly 23 percent of all U.S. home loans last year, to JPMorgan Chase’s 11 percent, according to industry tracker Inside Mortgage Finance.