Rising Mortgage Rates Chill Refinancing
The seasonally adjusted purchase index increased by 3% from the prior week’s report. On an unadjusted basis, the composite index decreased by 1% week-over-week. The unadjusted purchase index also rose 1% for the week, but remains 14% lower year-over-year.
Adjustable rate mortgage loans account for 8% of all applications, unchanged from a week ago.
The MBA’s refinance index decreased by 5% after declining by 3% in the previous week. The share of refinancings fell for the ninth consecutive week to 51% of all applications.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage was unchanged at 4.56%. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.46% to 4.49%. The average interest rate for a 15-year fixed-rate mortgage was unchanged at 3.62%.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.25% to 3.26%, its highest level since January. Rates on a 30-year FHA-backed fixed rate loan fell from 4.21% to 4.19%.
Refinancing continues to slide and is now down 75% from levels of May 2013, when 76% of loan applications came from home owners wanting to refinance mortgages. Rising mortgage interest rates will stifle refinancings and make it more difficult for first-time buyers to obtain a mortgage.