Mortgage Loan Rates Drop for Third Consecutive Week

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The Mortgage Bankers Association (MBA) released its report on mortgage applications Wednesday morning. The report noted a week-over-week increase of 0.4% in the group’s seasonally adjusted composite index for the week ending April 3, following an increase of 4.6% for the week ending March 20. Mortgage loan rates decreased on all types of loans last week.

On an unadjusted basis, the composite index increased by 1% week-over-week. The seasonally adjusted purchase index increased 7% compared to the week ended April 3. The unadjusted purchase index also rose by 7% for the week and is now 12% higher year-over-year.

The MBA’s refinance index decreased 3% week-over-week, and the percentage of all new applications that were seeking refinancing slipped from 60% to 57%, its lowest level since last October.

The MBA’s chief economist noted:

Purchase mortgage application volume last week increased to its highest level since July 2013, spurred on by still low mortgage rates and strengthening housing markets. Purchase volume has increased for three straight weeks now on a seasonally adjusted basis.

Adjustable rate mortgage loans accounted for 5.5% of all applications, down from 5.6% in the prior week.

The FHA share of all applications rose from 12.8% a week ago to 13.2%, and the VA share increased from 10.5% to 10.7%.

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The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 3.89% to 3.86%. The rate for a jumbo 30-year fixed-rate mortgage decreased from 3.90% to 3.81%. The average interest rate for a 15-year fixed-rate mortgage dropped from 3.21% to 3.15%.

The contract interest rate for a 5/1 adjustable rate mortgage loan fell from 2.93% to 2.76%, its lowest level since May 2013. Rates on a 30-year FHA-backed fixed rate loan fell from 3.73% to 3.69%.