The Mortgage Bankers Association (MBA) released its report on mortgage applications Wednesday morning, noting a week-over-week increase of 2.7% in the group’s seasonally adjusted composite index for the week ending April 1. Mortgage loan rates decreased on all loan types last week.
On an unadjusted basis, the composite index increased by 3% week over week. The seasonally adjusted purchase index decreased by 2% compared with the week ended March 25. The unadjusted purchase index also decreased by 32% for the week and is now 11% higher year over year.
The MBA’s refinance index increased by 7% week over week, and the percentage of all new applications that were seeking refinancing rose from 52.4% to 54.5%.
Adjustable rate mortgage loans accounted for 4.7% of all applications, down 0.2 points from the previous week.
Mortgage News Daily puts last week’s dovish comments by Fed Chair Janet Yellen in a mortgage market context:
Several major financial firms sharply downgraded Q1 GDP forecasts [on Tuesday], as did the Atlanta Fed’s popular GDPNow model. Current forecasts are getting dangerously close to zero growth. Couple that with investor anxiety over the impending earnings season and there’s reason to worry about stock markets maintaining recent gains. If stocks happen to reverse course, the bond market is typically one of the beneficiaries, and that means rates would move lower. …
If stocks actually do move significantly lower, it’s highly likely that rates would follow. Even now, rates are already very close to the lowest levels in 3 years. In fact, since mid-May 2013, we’ve only seen rates any lower than today 2-3 times, depending on the lender. As for particulars, the most aggressive lenders are back to quoting 3.5% on top tier conventional 30yr fixed scenarios, with the bulk being at 3.625%. FHA rates have been pinned against the floor at 3.25% and aren’t likely to go lower any time soon due to the structure of the secondary market for FHA loans.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 3.94% to 3.86%. The rate for a jumbo 30-year fixed-rate mortgage decreased from 3.82% to 3.76%. The average interest rate for a 15-year fixed-rate mortgage fell from 3.19% to 3.10%.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.07% to 2.94%. Rates on a 30-year FHA-backed fixed-rate loan fell from 3.76% to 3.73%.
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