Mortgage Loan Rates Dropped Slightly Last Week

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The Mortgage Bankers Association (MBA) released its weekly 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 October 21. Mortgage loan rates fell on four types of loans and rose on one over the past week. The prior week included an adjustment for the Columbus Day holiday.

On an unadjusted basis, the composite index increased by 7% week over week. The seasonally adjusted purchase index decreased by 7% compared with the week ended October 14. The unadjusted purchase index increased 3% for the week and is now 9% higher year over year.

The MBA’s refinance index decreased by 2% week over week, and the percentage of all new applications that were seeking refinancing rose from 61.5% to 62.7%.

Adjustable rate mortgage loans accounted for 4.2% of all applications, up 4.1% from the previous week.

According to Mortgage News Daily, Tuesday’s action in the mortgage-backed securities (MBS) market “reinforced” the upper end of the yield range on bonds. There was not enough strength in the bond market, though, to “challenge the lower end of the recent rate range.”

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 3.73% to 3.71%. The rate for a jumbo 30-year fixed-rate mortgage ticked down from 3.72% to 3.71%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.03% to 3.01%.

The contract interest rate for a 5/1 adjustable rate mortgage loan fell from 2.97% to 2.93%. Rates on a 30-year FHA-backed fixed-rate loan rose from 3.54% to 3.56%.