Mortgage Applications Tank

From CNNMoney.com - "Mortgage applications plunge":

Applications for U.S. home mortgages cratered to levels not seen since November last week as rates held stubbornly above record lows engineered by the Federal Reserve earlier this month, according to data from an industry group on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity plunged by 38.8% to 732.1 in the week ended Jan. 23.

Fixed 30-year mortgage rates averaged 5.22% in the week, down from 5.24% the previous week and 4.89% in early January, the MBA said.

The culprit:

Rising U.S. government borrowing to pay for financial bailouts and expected stimulus to stave off recession have begun to increase Treasury yields, offsetting Fed efforts to drive mortgage rates lower, analysts said. Benchmark 10-year Treasury yields, which help govern mortgage rates, have climbed nearly a half-percentage point since late December to 2.53% (up to 2.66% as of writing this post).

Refinances:

The MBA's seasonally adjusted index of refinancing applications plummeted 48% to 3,373.9 last week. The gauge of loan requests for home purchases declined 2.9% to 294.3.

The mortgage application numbers continue to be all over the board in recent reports - up and down. Even though mortgage rates have been trending higher, they're STILL CHEAP!