Rising Mortgage Loan Rates Weigh on Refinancing, New Purchases
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a drop of 11.7% in the group's seasonally adjusted composite index, following a drop of 3% for the previous week. Rates for all types of loans rose by more than 10 basis points during the week.
The seasonally adjusted purchase index decreased by 3% from the most recent report. On an unadjusted basis, the composite index dropped by 12% week-over-week. The unadjusted purchase index decreased by 4% for the week, and is up about 12% year-over-year.
The MBA's refinance index fell 16% week-over-week to its lowest level since July 2011.
The share of refinancings fell from 67% to 64%, its lowest level since May 2011. Adjustable rate mortgage loans account for 8% of all applications, up from 7% last week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 4.46% to 4.58%. The rate for a jumbo 30-year fixed-rate mortgage increased from 4.52% to 4.68%. The average interest rate for a 15-year fixed-rate mortgage rose from 3.55% to 3.64%.
The 30-year conventional mortgage rate is now at its highest point since July 2011. The 30-year jumbo has reached its highest level since October 2011, and the 15-year fixed-rate mortgage is at its highest point since July 2011.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.06% to 3.33%.
Once again, interest rates rose sharply this week, and the impact on refinancings of rising rates continues to intensify. Purchase applications also fell during the week, but the drop was less dramatic than the fall in refinancings. Mortgage loan rates remain attractive for buyers, and less so for refinancings.
Filed under: Housing