The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 0.7% in the group’s seasonally adjusted composite index for the week ending February 2. Mortgage loan rates rose again last week on four of five loan types that the MBA tracks. Three popular loan types posted multiyear highs last week.
On an unadjusted basis, the composite index increased by 4% week over week. The seasonally adjusted purchase index was unchanged compared with the week ended January 26. The unadjusted purchase index increased by 7% for the week and is now 8% higher year over year.
The MBA’s refinance index increased by 1% week over week, and the percentage of all new applications that were seeking refinancing slipped from 47.8% to 46.4%, its lowest level since last July.
Adjustable rate mortgage loans accounted for 6.1% of all applications, up 0.4 percentage points from the prior week.
The volatility in the equities markets sent investors looking to bonds last Friday and yields on the 10-year Treasury reached 2.81% on Tuesday, up nearly half a point compared with last year and up 33 basis points in the past month. But as Matthew Graham at Mortgage News Daily points out, actual movement in the mortgage market was somewhat muted:
[S]tocks and bonds are not reliable predictors of each other’s movement. Yes, we definitely saw stocks have a clear influence on bonds and rates [Monday], but that isn’t always going to be the case. It’s worth noting that 10yr bond futures prices didn’t move any more than 1.5% in response to more than a 7% drop in S&P futures.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage to its highest level since April 2014, up from 4.41% to 4.50%. The rate for a jumbo 30-year fixed-rate mortgage increased from 4.34% to 4.47%, also a high since April 2014. The average interest rate for a 15-year fixed-rate mortgage rose from 3.85% to 3.92%, its highest level since April 2011.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.79% to 3.77%. Rates on a 30-year FHA-backed fixed-rate loan increased from 4.40% to 4.47%.