Mortgage Loan Rates Jump as Loan Applications Rise
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 7.9% in the group’s seasonally adjusted composite index, following a drop of 7.2% for the previous week. Mortgage loan rates rose on all types of loans for the week ending September 12.
The seasonally adjusted purchase index increased 5% from the prior week’s report. On an unadjusted basis, the composite index increased by 19% week-over-week. The unadjusted purchase index increased by 14% for the week and remains 10% lower year-over-year.
Adjustable rate mortgage loans accounted for 7.6% of all applications, up slightly from 7.5% in the prior week.
The MBA’s refinance index increased by 2%, after dropping by 11% in the previous week. The share of refinancings increased from 55% to 57% of all applications, the highest level since February.
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The average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.27% to 4.36%, its highest level since June. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.15% to 4.24%. The average interest rate for a 15-year fixed-rate mortgage increased from 3.44% to 3.56%.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.12% to 3.19%. Rates on a 30-year FHA-backed fixed rate loan rose from 3.97% to 4.03%.
The MBA’s chief economist noted:
Application volume rebounded coming out of the Labor Day holiday, even as rates increased to their highest level in the last few months. Given the volatility in activity around the long weekend, it can be helpful to look at the change over a two week span: refinance applications are down 1.4 percent while purchase applications are up 2.1 percent. Purchase volume continues to track almost ten percent behind last year’s levels.
Also on Wednesday, the National Association of Home Builders is expected to report builder confidence increased in September.
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