The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a week-over-week decrease of 9.2% in the group’s seasonally adjusted composite index for the week ending November 11. Mortgage loan rates rose on all types of loans over the past week.
On an unadjusted basis, the composite index decreased by 10% week over week. The seasonally adjusted purchase index decreased by 6% compared with the week ended November 4. The unadjusted purchase index decreased 10% for the week and is now 3% higher year over year.
The MBA’s refinance index decreased by 11% week over week, and the percentage of all new applications that were seeking refinancing dropped from 62.3% to 61.9%.
Adjustable rate mortgage loans accounted for 4.7% of all applications, up from 4.5% the previous week.
Mortgage rates reached 4.00% on 30-year fixed loans this week, up from 3.625% one week ago. According to Matthew Graham at Mortgage News Daily, that is one of the worst weeks on record for mortgage rate increases. Is 4% now the new normal? Says Graham:
As is always the case, there’s never any way to be sure what the future holds when we’re dealing with financial markets. Although past precedent suggests a good possibility of a bounce back, there are examples of similar movement where rates didn’t make it back below the levels seen on the 4th day of the move (which is today in the present example) for an entire year! That alone is a big enough risk to dissuade all but the most aggressive risk-takers from trying to time the top of the rate market for now. If we see a more substantial push back toward lower rates, it will go a long way toward easing fears that we’re repeating the scarier examples of past rate spikes.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 3.77% to 3.95%, the highest rate so far this year. The rate for a jumbo 30-year fixed-rate mortgage rose from 3.75% to 3.89%, also a yearly high. The average interest rate for a 15-year fixed-rate mortgage increased from 3.03% to 3.15%, its highest level since March.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 2.92% to 3.11%, the highest rate since March. Rates on a 30-year FHA-backed fixed-rate loan rose from 3.61% to 3.73%, the highest level since April.