The Mortgage Bankers Association released its weekly report on mortgage applications this morning, noting a 7.2% decline in the group's composite index compared with last week's total. Applications for refinancing fell 9% (seasonally adjusted), while purchase applications increased by about 1% from the previous week. Unadjusted, the purchase index dropped 0.9% compared with the same week a year ago.
Refinancings now account for 80% of total applications, down from 81% a week ago. More than 96% of the applications were seeking fixed-rate loans.
The average contract interest rate for a conforming 30-year fixed-rate mortgage rose slightly from 3.76% to 3.86%. The rate for a jumbo 30-year fixed-rate mortgage also rose, from 4.03% to 4.11%. The average interest rate for a 15-year fixed-rate mortgage increased from 3.12% to 3.15%.
The contract interest rate for a 5/1 adjustable rate mortgage also rose slightly, from 2.73% to 2.74%.
Demand for refinancing has cooled as mortgage interest rates continue their slow and steady climb. Recent data on the housing market indicates that home sales prices are rising and banks are loosening (a little) lending requirements, making home purchases a little more attractive.
There's really no reason for the rise in interest rates except that mortgage buyers are willing to pay it. That willingness is not lost on the lenders.
Filed under: 24/7 Wall St. Wire, Housing, Research