Higher Loan Rates Chill Mortgage Loan Applications
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a drop of 9.8% in the group's seasonally adjusted composite index following a decline of 7.3% for the previous week. Mortgage loan rates rose again last week.
The seasonally adjusted purchase index decreased by 3% from the last report. On an unadjusted basis, the composite index fell by 10% week-over-week. The unadjusted purchase index decreased by 4% for the week, but it is still up about 10% year-over-year.
The MBA's refinance index fell 12% week-over-week.
The share of refinancings fell from the previous week's total of 76% to 74%. Adjustable rate mortgage loans now account for 5% of all applications, up 1% from last week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 3.67% to 3.78%. The rate for a jumbo 30-year fixed-rate mortgage increased, from 3.87% to 3.93%. The average interest rate for a 15-year fixed-rate mortgage rose from 2.88% to 2.96%.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 2.55% to 2.6%.
An MBA executive noted:
Mortgage rates increased to their highest level since March last week, leading to the largest single week drop in refinance applications this year. The refinance index has fallen almost 19 percent over the past two weeks and is back to its lowest level since late March.
The second consecutive decline in mortgage applications week-over-week follows two weeks of rising applications. Mortgage loan rates continue to climb higher, again after two weeks of slight declines. Higher loan rates appear to be having a significant impact on refinancings.
Filed under: 24/7 Wall St. Wire, Housing, Research