The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 0.8% in the group’s seasonally adjusted composite index for the week ending March 24. During the week, mortgage loan rates fell on all five types of loans that the MBA tracks.
On an unadjusted basis, the composite index decreased by 0.4% week over week. The seasonally adjusted purchase index also increased by 1% compared with the week ended March 17. The unadjusted purchase index increased by 2% for the week and is now 4% higher year over year.
The MBA’s refinance index decreased by 3% week over week, and the percentage of all new applications that were seeking refinancing slipped from 45.1% to 44%, the lowest level of refinancings since October 2008.
Adjustable rate mortgage loans accounted for 8.5% of all applications, down from 9% in the prior week.
Mortgage rates reached their lowest level in more than a month on Monday, but jumped back up on Tuesday as bond yields fell. Matthew Graham at Mortgage News Daily explains:
In addition to the updates on the healthcare bill, a top Fed official confirmed that 3 rate hikes are likely in 2017. This added additional weakness to bond markets (which dictate today’s interest rates). Almost every lender recalled the morning’s initial rate sheets and “repriced” to higher rates in the afternoon. Whereas 4.125% had been just become the most prevalent conventional 30yr fixed quote for top tier scenarios as of yesterday [Monday], today brings us back to 4.25%. Not every lender will be quoting different rates. Those who are quoting the same rates will instead be charging higher upfront costs (thus raising the effective rate).
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.46% to 4.33%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.40% to 4.26%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.68% to 3.57%.
The contract interest rate for a 5/1 adjustable-rate mortgage loan decreased from 3.41% to 3.30%. Rates on a 30-year FHA-backed fixed-rate loan fell from 4.33% to 4.24%.