Rising Loan Rates Reduce New Mortgage Applications
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a drop of 7.3% in the group's seasonally adjusted composite index, following a rise of 7% for the previous week. Mortgage loan rates rose slightly last week.
The seasonally adjusted purchase index decreased by 4% from the last report. On an unadjusted basis, the composite index also fell by 7% week-over-week. The unadjusted purchase index decreased by 4% for the week and is up 10% year-over-year.
The share of refinancings remained unchanged from the previous week's total of 76%. Adjustable rate mortgage loans now account for 4% of all applications, also unchanged from last week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 3.59% to 3.67%. The rate for a jumbo 30-year fixed-rate mortgage increased from 3.79% to 3.87%. The average interest rate for a 15-year fixed-rate mortgage rose from 2.81% to 2.88%.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 2.53% to 2.55%.
The decline in mortgage applications week-over-week follows two weeks of rising applications. Mortgage loan rates are slightly higher, again after two weeks of slight declines. One explanation for the changes is that demand for mortgages has picked up a little and caused interest rates to rise. Higher loan rates generally cause applications to drop. There does not appear to be any cause for serious concern in these numbers.
Filed under: 24/7 Wall St. Wire, Housing, Research