The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a drop of 2.5% in the group’s seasonally adjusted composite index following a decline of 4.6% for the previous week. Mortgage loan rates increased across the board once again last week.
The seasonally adjusted purchase index increased by 2% from the last report. On an unadjusted basis, the composite index again fell 3% week-over-week. The unadjusted purchase index increased by 0.3% for the week and is up about 6% year-over-year.
The MBA’s refinance index fell 5% after dropping 8% in the previous week.
The share of refinancings fell a from 61% to 60%. That is the lowest refinancing rate since April 2011. Adjustable rate mortgage loans account for 7% of all applications, up from 7% the prior week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.68% to 4.8%, the highest rate since April 2011. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.74% to 4.78%. The average interest rate for a 15-year fixed-rate mortgage rose from 3.71% to 3.84%.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.44% to 3.5%.
Mortgage interest rates are now at two-year highs and the decline in refinancings will not slow down.
Refinancings slipped again to a two-year low as interest rates bounced higher after falling last week, but purchase applications remain higher than they were a year ago. We wrote earlier this week about the impact rising rates are having on big mortgage lenders who are cutting jobs as the mortgage lending business slows down.
Later today we will hear from the National Association of Realtors with its report on pending home sales for July. The consensus estimate calls for a drop of 1% compared with the June index reading.