Mortgage Loan Rates Ticked Lower, Refinancing Increased
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a week-over-week increase of 2.9% in the group’s seasonally adjusted composite index for the week ending September 30. Mortgage loan rates dipped on four types of loans and remained unchanged on one over the past week.
On an unadjusted basis, the composite index increased by 3% week over week. The seasonally adjusted purchase index decreased by 0.1% compared with the week ended September 23. The unadjusted purchase index decreased 0.2% for the week and is now 14% lower year over year.
The MBA’s refinance index increased by 5% week over week, and the percentage of all new applications that were seeking refinancing rose from 62.7% to 63.8%.
Adjustable rate mortgage loans accounted for 4.5% of all applications, up from 4.4% the previous week.
Matthew Graham at Mortgage News Daily noted on Tuesday that mortgage rates moved significantly higher, up from 3.375% on top-tier scenarios to 3.5%. In and of itself, not a serious problem yet. But the news behind the move appears to have been talk of reducing the amount of bond buying by the European central banks. The impact in the United States would be less than in Europe, but in general a tapering would cause interest rates to rise. How sharply is anyone’s guess at this point.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 3.66% to 3.62%. The rate for a jumbo 30-year fixed-rate mortgage fell from 3.64% to 3.60%. The average interest rate for a 15-year fixed-rate mortgage decreased from 2.95% to 2.93%.
The contract interest rate for a 5/1 adjustable rate mortgage loan remained unchanged at 2.92%. Rates on a 30-year FHA-backed fixed-rate loan decreased from 3.52% to 3.50%.