The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 3.1% in the group’s seasonally adjusted composite index for the week ending March 10. During the week, mortgage loan rates increased on all types of fixed-rate loans and decreased slightly on adjustables.
On an unadjusted basis, the composite index increased by 4% week over week. The seasonally adjusted purchase index increased by 2% compared with the week ended March 3. The unadjusted purchase index increased by 3% for the week and is now 6% higher year over year.
The MBA’s refinance index increased by 4% week over week and the percentage of all new applications that were seeking refinancing rose from 45.4% to 45.6%.
Adjustable rate mortgage loans accounted for 8.2% of all applications, up from 7.7% in the prior week.
Mortgage rates have shown little movement ahead of this afternoon’s announcement from the Federal Open Market Committee (FOMC) on an interest rate increase. A rate hike is a near certainty, but lenders may be paying more attention to whether the Federal Rserve suggests in its roundabout way that more than three rate hikes could be on tap for this year. An accelerated forecast for rate hikes could move mortgage loan rates higher quickly. Mortgage News Daily’s Matthew Graham makes the point:
If the Fed accelerates less than expected, there is still a chance for mortgage rates to hold the line at the current ceiling (4.375% for top tier 30yr fixed scenarios for the average lender). If forecasts outpace expectations, rates could move higher quickly.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.36% to 4.46%, its highest level since April 2014. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.27% to 4.44%, also a three-year high. The average interest rate for a 15-year fixed-rate mortgage increased from 3.57% to 3.66%.
The contract interest rate for a 5/1 adjustable-rate mortgage loan decreased from 3.48% to 3.45%. Rates on a 30-year FHA-backed fixed-rate loan rose from 4.187% to 4.29%, its highest level since January 2014.