I was talking to a local mortgage rep yesterday about the recent run-up in rates, and she said she had several clients on the bubble for approvals. Many buyers now shopping for a home are likely facing a similar situation. Having qualified at a lower rate well below 4%, they are now staring at another scenario altogether with rates spiking to 4.5 percent or higher. The unfortunate reality is that homes are now instantly less affordable. The latest data from the Mortgage Bankers Association on applications suggests this is causing potential new home buyers to rethink their situation. Applications for new home mortgages declined 15% in June. The latest weekly survey showed that overall mortgage purchase applications declined by 3 percent. The MBA weekly survey also noted that the unadjusted Purchase Index fell 23 percent from the previous week and was now only 5% higher than the same time a year ago.