The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 4.3% in the group’s seasonally adjusted composite index. That followed a drop of 1.6% for the previous week. Mortgage loan rates on all types of loans fell during the week.
The seasonally adjusted purchase index increased by 1% from the prior week’s report. On an unadjusted basis, the composite index increased by 5% week-over-week. The unadjusted purchase index rose 2% for the week, but remains 16% lower year-over-year.
Adjustable rate mortgage loans account for 8% of all applications, unchanged now for several weeks.
The MBA’s refinance index increased by 7%, after declining by 5% in the previous week. The share of refinancings rose for the first time in nearly three months from 51% to 52% of all applications.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage fell from 4.56% to 4.47%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.49% to 4.39%. The average interest rate for a 15-year fixed-rate mortgage slipped from 3.62 to 3.54%.
The contract interest rate for a 5/1 adjustable rate mortgage loan dropped from 3.26% to 3.15%. Rates on a 30-year FHA-backed fixed rate loan fell from 4.19% to 4.14%.
The refinancing index improved slightly, from down 75% to down 73% year-over-year. That is the first increase in the index for some time. In May of 2013, 76% of all applications were refinancings. The sharp drop in mortgage loan rates is almost certainly a response to the drop in consumer interest either in refinancing or buying a house.