The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 5.5% in the group’s seasonally adjusted composite index following a rise of 1% for the previous week. Mortgage loan rates increased again last week on three of four loan types.
The seasonally adjusted purchase index decreased by 6% from the prior week's report to its lowest level in a year. On an unadjusted basis, the composite index decreased by 6% week-over-week. The unadjusted purchase index decreased by 9% for the week, and is 12% lower year-over-year.
Mortgage rates continue to creep up and home sales continue to slip. An MBA executive noted:
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Mortgage applications fell further last week, with the market index falling to its lowest level in more than a dozen years. Both purchase and refinance applications fell as interest rates increased going into today's Federal Open Market Committee meeting.
The MBA's refinance index decreased by 24%, after dropping by 2% in the previous week. The share of refinancings rose by a point, totaling 66% of all applications. Adjustable rate mortgage loans account for 8% of all applications, unchanged from the prior week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.61% to 4.62%. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.59% to 4.61%. The average interest rate for a 15-year fixed-rate mortgage remained unchanged at 3.66%.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.11% to 3.2%.
Conforming and jumbo fixed-rate mortgages are back at levels last seen in September. The sharp rise in adjustable rate mortgages likely is due to demand for the much lower interest rate. Adjustable rate mortgages have begun to make a comeback as other mortgage rates rise. This is a good thing now, but could become a problem later.
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