The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 3.2% in the group's seasonally adjusted composite index for the week ending January 27. During the week, mortgage loan rates increased on three types of fixed-rate loans and decreased on adjustables and FHA loans.
On an unadjusted basis, the composite index increased by 11% week over week, largely the result of the prior week's Martin Luther King Jr. holiday. The seasonally adjusted purchase index decreased by 6% compared with the week ended January 20. The unadjusted purchase index increased by 12% for the week and is now 2% higher year over year.
The MBA's refinance index decreased by 2% week over week, and the percentage of all new applications that were seeking refinancing slipped from 50% to 49.4%.
Adjustable rate mortgage loans accounted for 6.4% of all applications, up from 5.7% the prior week.
The first order signed by President Trump following his inauguration suspended a pending rate cut to FHA mortgage loan premiums. The rate cut was announced during the last days of the Obama administration and would have cut the insurance premium from 0.85% to 0.60%. On a $100,000 mortgage that would amount to around $20 a month. Not much, obviously, but maybe enough to push first-time buyers into a debt-to-income ratio that disqualifies them from receiving a mortgage.
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According to the MBA, last week's average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.35% to 4.39%. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.28% to 4.32%. The average interest rate for a 15-year fixed-rate mortgage increased from 3.57% to 3.61%.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.41% to 3.33%. Rates on a 30-year FHA-backed fixed-rate loan fell from 4.19% to 4.17%.