The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 2.6% in the group’s seasonally adjusted composite index for the week ending October 27. During the week, mortgage loan rates rose on all five loan types that the MBA tracks with four rising to multimonth highs.
On an unadjusted basis, the composite index decreased by 3% week over week. The seasonally adjusted purchase index decreased by 1% compared with the week ended October 20. The unadjusted purchase index decreased by 2% for the week and is now 10% higher year over year.
The MBA’s refinance index decreased by 5% week over week, and the percentage of all new applications that were seeking refinancing fell from 49.5% to 48.7%.
Adjustable rate mortgage loans accounted for 6.8% of all applications, up 0.4 percentage points from the prior week.
Mortgage loan rates rose to their highest level since July on 30-year fixed, 15-year fixed and FHA loans last week. Rates for adjustable-rate loans rose to their highest level since March. Bond markets are waiting for an announcement from the president on his choice to be the next chairperson of the Federal Reserve. Jerome Powell, who is viewed as the more accommodative choice, is the bond market’s favorite. John Taylor, a long-time interest-rate hawk, is the other front-runner for Janet Yellen’s job.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 4.18% to 4.22%. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.11% to 4.16%. The average interest rate for a 15-year fixed-rate mortgage increased from 3.48% to 3.52%.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.29% to 3.33%. Rates on a 30-year FHA-backed fixed rate loan rose from 4.04% to 4.07%.