The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 5.8% in the group’s seasonally adjusted composite index for the week ending February 24. During the week, mortgage loan rates decreased on all four types of fixed-rate loans and increased on adjustable rate mortgages.
On an unadjusted basis, the composite index decreased by 3% week over week. The seasonally adjusted purchase index increased by 7% compared with the week ended February 17. The unadjusted purchase index decreased by 1% for the week and is now 5% lower year over year.
The MBA’s refinance index increased by 5% week over week, and the percentage of all new applications that were seeking refinancing slipped from 46.2% to 45.1%, its lowest level since November of 2008.
Adjustable rate mortgage loans accounted for 7.3% of all applications, unchanged from the prior week.
CNBC reported on Tuesday that the spring home buying market has started early this year due to higher demand and “overheating home prices.” The S&P CoreLogic Case-Shiller home price index rose to a 30-year high in December. CNBC observed:
Potential buyers today are facing tough new realities. Some houses are clearly overpriced, and renting is still a better financial option in some markets. Competition is fierce for the best homes, and buyers have to be ready to pull out all the tricks.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.36% to 4.30%. The rate for a jumbo 30-year fixed-rate mortgage dipped from 4.29% to 4.23%. The average interest rate for a 15-year fixed-rate mortgage fell from 3.56% to 3.51%.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.31% to 3.35%. Rates on a 30-year FHA-backed fixed-rate loan decreased from 4.14% to 4.07%.