Housing
Mortgage Loan Rates Rose to 2-Month Highs Last Week
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The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Thursday morning, noting an increase of 1.4% in the group’s seasonally adjusted composite index for the week ending June 30. During the week, mortgage loan rates rose on all five loan types that the MBA tracks.
On an unadjusted basis, the composite index increased by 1% week over week. The seasonally adjusted purchase index increased by 3% compared with the week ended June 23. The unadjusted purchase index also increased by 3% for the week and is now 6% higher year over year.
The MBA’s refinance index decreased by 1.5% week over week, and the percentage of all new applications that were seeking refinancing dipped from 45.6% to 44.9%.
Adjustable rate mortgage loans accounted for 7.2% of all applications, up from 7.0% in the prior week.
Through Monday, mortgage rates had increased on each of the five previous days and mortgage rates had increased to their highest level in nearly two months, according to Matthew Graham of Mortgage News Daily. The most often-quoted rate the day before the Independence Day holiday was 4.125%, up a quarter of a point in just five days. That was also Wednesday’s most prevalent rate offer.
That quarter point would cost a borrower about $14 a month on a $200,000 mortgage, according to Graham. That sounds minimal enough. But if you wanted to get the actual rate you locked in six days ago, you’d have to pay about $1,400 up front. That $1,400 is the real cost of the quarter-point rate hike and, added to the mortgage payment, would cost about $5,000 over the 30-year term of the loan.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 4.13% to 4.20%, its highest level since May. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.09% to 4.10%. The average interest rate for a 15-year fixed-rate mortgage increased from 3.39% to 3.43%. Both loan types also reached their highest level since May.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.31% to 3.37%, another high since May. Rates on a 30-year FHA-backed fixed-rate loan rose from 4.02% to 4.04%.
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