Mortgage Loan Rates Mixed as Applications Rise Sharply
The Mortgage Bankers Association's latest report on mortgage applications noted a week-over-week increase of more than 11 in the group’s seasonally adjusted composite index for the week ending August 28.
The Mortgage Bankers Association (MBA) released its report on mortgage applications Wednesday morning. It noted a week-over-week increase of 11.3% in the group’s seasonally adjusted composite index for the week ending August 28, following an increase of 0.2% for the previous week. Mortgage loan rate changes were mixed last week.
On an unadjusted basis, the composite index increased by 10% week over week. The seasonally adjusted purchase index rose by 4% compared to the week ended August 21. The unadjusted purchase index increased by 2% for the week and is now 25% higher year over year.
The MBA’s refinance index increased by 17% week over week to its highest level since July, and the percentage of all new applications that were seeking refinancing jumped from 55.3% to 58.7%.
Adjustable rate mortgage loans accounted for 7.5% of all applications, up sharply from 6.8% in the prior week.
The MBA’s chief economist noted:
Although mortgage rates [for 30-year fixed conventional loans] were unchanged for the week, Treasury rates were down sharply early in the week due to the global stock market rout and this led to a significant increase in application volume.
And Mortgage News Daily offers this advice:
The potential for bigger-than-average movement can’t be over-emphasized when considering the upcoming days. With the the highest volatility in stock markets since at least 2011, the Fed apparently considering raising rates in 2 weeks, and interest rates growing increasingly quiet, the stage seems set for a big break. The risks and rewards grow exponentially from [Monday] as the week progresses due to the scheduled data. If you’re not willing to absorb a significant increase in mortgage costs in exchange for a chance at significant savings, now’s the time to lock.
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According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage remained unchanged at 4.08%. The rate for a jumbo 30-year fixed-rate mortgage increased from 4.00% to 4.05%. The average interest rate for a 15-year fixed-rate mortgage fell from 3.33% to 3.30%.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 2.96% to 3.05%. Rates on a 30-year FHA-backed fixed-rate loan decreased from 3.90% to 3.87%.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
