The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Tuesday morning, noting a decrease of 6.3% in the group’s seasonally adjusted composite index, following a drop of 5.5% for the previous week. Mortgage loan rates increased last week on all four loan types to their highest levels since September.
The seasonally adjusted purchase index decreased by 4% from the prior week’s report. On an unadjusted basis, the composite index decreased by 7% week-over-week. The unadjusted purchase index decreased by 5% for the week, and is 11% lower year-over-year.
Mortgage rates continue to creep up and home sales continue to slip. An MBA executive noted:
Following the Federal Reserve’s taper announcement, mortgage application volume dropped again last week, with rates increasing and refinance application volume falling to its lowest level since November 2008. Purchase application volume was weak too, continuing to run more than ten percent below last year’s pace.
The MBA’s refinance index decreased by 8%, after dropping by 24% in the previous week. The share of refinancings fell by one point, totaling 65% of all applications. Adjustable rate mortgage loans account for 8.3% of all applications, up by 0.3% from the prior week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.62% to 4.64%. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.61% to 4.63%. The average interest rate for a 15-year fixed-rate mortgage rose from 3.66% to 3.74%.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.2% to 3.26%.
Home buying typically slows way down at this time of year, and this year is no exception. Yet the year-over-year declines have to be worrisome to homebuilders. Fortunately for buyers, inventories are getting better, but new lending regulations that come into effect in the new year could make it more difficult to qualify for a mortgage. The situation can be fairly described as a mixed bag.