Mortgage Loan Rate Movements Mixed, Applications Drop
New applications fell in the Thanksgiving holiday week while mortgage loan rates moved in all directions.
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The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 3.1% in the group’s seasonally adjusted composite index for the week ending November 24. The results include an adjustment for the Thanksgiving holiday. During the week, mortgage loan rates rose on two of five loan types that the MBA tracks, fell on two others and was unchanged on one.
On an unadjusted basis, the composite index decreased by 34% week over week. The seasonally adjusted purchase index increased by 2% compared with the week ended November 17. The unadjusted purchase index decreased by 32% for the week and is now 6% higher year over year.
The MBA’s refinance index decreased by 6% week over week, and the percentage of all new applications that were seeking refinancing fell from 49.9% to 48.7%.
Adjustable rate mortgage loans accounted for 6.2% of all applications, down 0.3 percentage points from the prior week.
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The bond market’s reaction to Tuesday’s confirmation hearing for Jerome Powell to head the Federal Reserve was positive but resulted in little rate movement, according to a report at Mortgage News Daily. When (if?) Congress passes a tax bill is likely the next political driver for mortgage rates.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage remained unchanged at 4.20%. The rate for a jumbo 30-year fixed-rate mortgage decreased from 4.16% to 4.14%. The average interest rate for a 15-year fixed-rate mortgage increased from 3.56% to 3.57%.
The contract interest rate for a 5/1 adjustable rate mortgage loan jumped from 3.31% to 3.42%. Rates on a 30-year FHA-backed fixed-rate loan fell from 4.08% to 4.07%.
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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.
