Mortgage rates have whipsawed of late, falling for a couple of weeks in concert with moves in the bond market caused by the Federal Reserve hiking interest rates. "The purchase market continues to experience a slowdown," says Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Banker's Association.

Demand for mortgage applications rose 0.2% from a week earlier. Refinance applications increased over three percent but remained more than 80% lower than a year ago. The July jobs report could force the Federal Reserve to continue raising interest rates at the fastest pace since 1994.

U.S. employers unexpectedly added 528,000 jobs in July, the Labor Department said last week. The survey covers over 75% of all U.S.-based retail residential mortgage applications and has been conducted weekly since 1990. The Labor Department says the gain defied fears of a slowdown in labor markets.
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