Housing

Mortgage Loan Rates Rose Last Week Ahead of FOMC Meeting

Paul Ausick

Published: April 27, 2016 7:20 am

Last Updated: January 13, 2020 10:15 am

The Mortgage Bankers Association (MBA) released its report on mortgage applications Wednesday morning, noting a week-over-week decrease of 4.1% in the group’s seasonally adjusted composite index for the week ending April 22. Mortgage loan rates moved higher on all types of loans last week.

On an unadjusted basis, the composite index decreased by 3% week over week. The seasonally adjusted purchase index decreased by 2% compared with the week ended April 15. The unadjusted purchase index decreased by 1% for the week and is now 14% higher year over year.

The MBA’s refinance index decreased by 5% week over week, and the percentage of all new applications that were seeking refinancing fell from 55.4% to 54.4%. Higher lending rates typically cool enthusiasm for refinancing.

Adjustable rate mortgage loans accounted for 5.2% of all applications, up from 5% in the previous week.

Mortgage rates started the week at their highest level since mid-March, and that’s where they ended up Tuesday. The Federal Open Market Committee announcement due at 2:00 p.m. Wednesday is holding rates steady, but no matter what the Federal Reserve says, bond markets are likely to react and mortgage rates along with them. No one expects a rate hike this month, but the announcement will be carefully parsed for clues to the next increase. Bond rates are likely to be increasingly volatile until the end of this week. The same holds true for mortgage rates.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 3.83% to 3.85%. The rate for a jumbo 30-year fixed-rate mortgage increased from 3.77% to 3.78%. The average interest rate for a 15-year fixed-rate mortgage increased from 3.06% to 3.09%.

The contract interest rate for a 5/1 adjustable rate mortgage loan also rose, from 2.91% to 3.02%. Rates on a 30-year FHA-backed fixed-rate loan rose from 3.64% to 3.66%.