Mortgage Loan Rates Remain Low, but Mortgage Applications Falter
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 2.2% in the group’s seasonally adjusted composite index. That followed a rise of 2.4% for the previous week. Mortgage loan rate changes were varied again last week.
The seasonally adjusted purchase index increased 0.2% from the prior week’s report. On an unadjusted basis, the composite index decreased by 2% week-over-week. The unadjusted purchase index increased by 1% for the week, and remains 12% lower year-over-year.
Adjustable rate mortgage loans account for 8% of all applications, unchanged from previous weeks.
The MBA’s refinance index decreased by 4%, after rising by 4% in the previous week. The share of refinancings decreased from 54% to 53% of all applications.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage remained unchanged for the second consecutive week at 4.33%. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.21% to 4.22%. The average interest rate for a 15-year fixed-rate mortgage was unchanged at 3.47%.
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The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.21% to 3.31%. Rates on a 30-year FHA-backed fixed rate loan were unchanged at 4.03%.
Except for the 10-basis point rise in the 5/1 adjustable rate loan, mortgage loan rates were unchanged or up by only a single basis point. The sharp rise in the ARM rate could be due to demand as highly qualified borrowers choose the cheaper loans to refinance jumbo mortgages and keep the low rate for at least another five years.
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