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 May 18. Mortgage loan rates all posted multiyear highs last week.
After the big jump in mortgage loan rates, the first two days of this week retreated to an almost dull state of calm. Rates have moved little but remain within fractions of a point of the seven-year highs posted last week.
Matthew Graham at Mortgage News Daily spells it out for would-be borrowers:
The general expectation is that rates can continue to move higher as long as the economy continues to tolerate higher borrowing costs. Mortgage lenders know that we are now in a rising rate environment. That means they’re less likely to offer huge improvements on rate sheets unless we see a sustained and substantial improvement in bond market levels.
On an unadjusted basis, the MBA’s composite index decreased by 3% week over week. The seasonally adjusted purchase index dropped by 2% compared with the week ended May 11. The unadjusted purchase index decreased by 3% for the week and is now 3% higher year over year.
The MBA’s refinance index decreased by 4% week over week, and the percentage of all new applications that were seeking refinancing dipped week over week from 35.9% to 35.7%.
Adjustable rate mortgage loans accounted for 6.8% of all applications, up from 6.5% in the prior week.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.77% to 4.86%, its highest level since April 2011. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.73% to 4.81%, its highest level since September 2013. The average interest rate for a 15-year fixed-rate mortgage rose from 4.20% to 4.31%, its highest level since February 2011.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 4.09% to 4.12%, the highest level for the MBA survey since it began in 1990. Rates on a 30-year FHA-backed fixed rate loan jumped from 4.78% to 4.90%, the highest level since May 2011.