Mortgage Loan Rates Wobble, Waiting for the Fed
On an unadjusted basis, the composite index decreased by 7% week over week. The seasonally adjusted purchase index fell by 1% compared with the week ended August 28. The unadjusted purchase index decreased by 3% for the week, and is now 41% higher year over year.
The MBA’s refinance index decreased by 10% week over week, and the percentage of all new applications that were seeking refinancing dropped from 58.7% to 56.9%.
Adjustable rate mortgage loans accounted for 6.9% of all applications, down sharply from 7.5% in the prior week.
Mortgage News Daily summed up the indecisive mortgage market:
Mortgage rates moved back up into their recent indecisive range [Tuesday], foiling a halfhearted attempt to move lower late last week. Much of the indecision is assumed to be due to the Fed’s upcoming meeting. Many market participants think the Fed will hike rates for the first time since the Financial Crisis, though just as many think they’ll hold off until December at the earliest. Mortgage rates are not directly dictated by the Fed’s policy rate, but they tend to move higher during periods where the Fed is raising rates. … Most lenders continue to quote conventional 30yr fixed rates of 4.0% on top tier scenarios.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 4.08 to 4.10%. The rate for a jumbo 30-year fixed-rate mortgage decreased from 4.05% to 4.03%. The average interest rate for a 15-year fixed-rate mortgage increased from 3.30% to 3.34%.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.05% to 3.03%. Rates on a 30-year FHA-backed fixed-rate loan increased from 3.87% to 3.90%.