The Mortgage Bankers Association released its weekly report on mortgage applications this morning, noting a 1.8% decline in the group’s composite index compared with last week’s total. Applications for refinancing fell 2% (seasonally adjusted), while purchase applications declined by about 1% from the previous week. Unadjusted, the purchase index dropped 12% compared with the same week a year ago.
Refinancings now account for 81% of total applications, with more than 96% of the applications seeking fixed-rate loans.
The average contract interest rate for a conforming 30-year fixed-rate mortgage rose slightly from 3.75% to 3.76%. The rate for a jumbo 30-year fixed-rate mortgage also rose, from 4.01% to 4.04%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.09% to 3.08%.
The contract interest rate for a 5/1 adjustable rate mortgage also rose slightly, from 2.73% to 2.72%.
Demand for mortgages rose in the second quarter by the most in three years, according to a report from the Federal Reserve. Housing inventory remains relatively low, which pushes home prices up. That could explain the growing number of refinancings, and the slight rise in interest rates could indicate that lenders, too, are taking advantage of increased demand for loans.