Mortgage Loan Rates Show No Sign of Retreating From New Highs

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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 January 26. Mortgage loan rates rose again last week on all five loan types that the MBA tracks. Two popular loan types reached nine-month highs last week, while three others posted multiyear highs.

On an unadjusted basis, the composite index increased by 12% week over week. The seasonally adjusted purchase index decreased by 3% compared with the week ended January 19. The unadjusted purchase index increased by 15% for the week and is now 10% lower year over year.

The MBA’s refinance index decreased by 3% week over week, and the percentage of all new applications that were seeking refinancing slipped from 49.4% to 47.8%.

Adjustable rate mortgage loans accounted for 5.7% of all applications, up half a percentage point from the prior week.

Mortgage rates posted a nine-month high last Friday and have continued to shoot higher as the sell-off in bonds drives yields higher. The U.S. 10-year Treasury yield reached 2.72% on Tuesday, and the most prevalent rate offered on a 30-year fixed-rate conforming mortgage loan fell in the range of 4.375% to 5.00%, up from 4.25% a week ago.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage went to its highest level since last March, up from 4.36% to 4.41%. The rate for a jumbo 30-year fixed-rate mortgage increased from 4.31% to 4.34%, also a high since last March. The average interest rate for a 15-year fixed-rate mortgage rose from 3.81% to 3.85%, its highest level since April 2011.

The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.70% to 3.79%, the highest ARM rate since March 2011. Rates on a 30-year FHA-backed fixed-rate loan increased from 4.37% to 4.40%, the highest level since September 2013.