The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 0.4% in the group’s seasonally adjusted composite index for the week ending July 21. During the week, mortgage loan rates decreased on the 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 decreased by 2% compared with the week ended July 14. The unadjusted purchase index also decreased by 2% for the week and is now 8% higher year over year.
The MBA’s refinance index increased by 3% week over week, and the percentage of all new applications that were seeking refinancing rose from 44.7% to 46%.
Adjustable rate mortgage loans accounted for 6.8% of all applications, up 0.1 percentage point from the prior week.
Mortgage loan rates began this week at their lowest levels for the month of July, according to Mortgage News Daily. The most prevalent rate for a 30-year fixed-rate loan was 4.0%. Then came a major sell-off in the bond markets on Tuesday and rates began moving marginally higher. This afternoon’s FOMC meeting announcement could move mortgage markets, particularly if the committee (unexpectedly) raises the fed funds rate again. Since the beginning of the year, mortgage loan rates have trended downward, and there is no particular reason for the trend to end any time soon.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.22% to 4.17%. The rate for a jumbo 30-year fixed-rate mortgage slipped from 4.18% to 4.06%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.48% to 3.45%.
The contract interest rate for a 5/1 adjustable rate mortgage loan fell from 3.32% to 3.29%. Rates on a 30-year FHA-backed fixed-rate loan dipped from 4.10% to 4.05%.