Mortgage Loan Rates Jump, Applications Dip
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 0.2% in the group’s seasonally adjusted composite index for the week ending April 20. Mortgage loan rates rose last week on all five loan types that the MBA tracks, and four posted multiyear highs
On an unadjusted basis, the composite index increased by 1% week over week. The seasonally adjusted purchase index was unchanged compared with the week ended April 13. The unadjusted purchase index increased by 1% for the week and is now 11% higher year over year.
The MBA’s refinance index decreased by 0.3% week over week, and the percentage of all new applications that were seeking refinancing dipped week over week from 37.6% to 37.2%, its lowest level since September 2008.
Adjustable rate mortgage loans accounted for 6.5% of all applications, down from 6.6% in the prior week.
Mortgage loan rates have begun moving higher in response to mounting pressure on a number of fronts, according to Matthew Graham at Mortgage News Daily. The Federal Reserve’s policy rate increases, increasing amounts of U.S. Treasury debt being auctioned to pay for the Trump tax cuts, and worries that inflation will rise have all had a hand in lifting the most prevalent mortgage loan rate on a 30-year fixed-rate conforming loan rise from last week’s 4.50% to around 4.64% on Tuesday.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 4.66% to 4.73%, its highest level since September 2013. The rate for a jumbo 30-year fixed-rate mortgage jumped from 4.53% to 4.64%, a level last seen in January 2014. The average interest rate for a 15-year fixed-rate mortgage rose from 4.08% to 4.13%, its highest level since April 2011.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.94% to 3.98%, the highest level since February 2011. Rates on a 30-year FHA-backed fixed-rate loan rose from 4.70% to 4.71%.