Mortgage Loan Rates Reach 6-Month Lows

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The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 7.1% in the group’s seasonally adjusted composite index for the week ending June 2. During the week, mortgage loan rates decreased on all five loan types that the MBA tracks. The results include an adjustment for the Memorial Day holiday.

On an unadjusted basis, the composite index decreased by 15% week over week. The seasonally adjusted purchase index increased by 10% compared with the week ended May 26. The unadjusted purchase index decreased by 14% for the week and is now 6% higher year over year.

The MBA’s refinance index increased by 10% week over week, and the percentage of all new applications that were seeking refinancing fell from 43.2% to 42.1%.

Adjustable rate mortgage loans accounted for 7.4% of all applications, down 0.3 percentage points compared to the prior week.

Matthew Graham at Mortgage News Daily noted on Tuesday that the average lender was quoting mortgage rates in the high 3% range for the most qualified borrowers. Demand for U.S. Treasury bonds has driven down interest rates on the bonds, and a recent report that China intends to wade back into the U.S. bond market helped increase demand for bonds even more.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage dipped from 4.17% to 4.14%, the lowest level since November. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.11% to 4.08%, also a low since November. The average interest rate for a 15-year fixed-rate mortgage slipped from 3.42% to 3.39%, another six-month low.

The contract interest rate for a 5/1 adjustable-rate mortgage loan decreased from 3.22% to 3.19%. Rates on a 30-year FHA-backed fixed-rate loan slipped from 4.03% to 4.01%.