Mortgage Applications Tumble as Interest Rates Continue Climbing
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decline of 7.1% in the group’s seasonally adjusted composite index for the week ending October 12. Mortgage interest rates rose on four of five types of loans the MBA tracks.
Mortgage loan rates for top-tier borrowers rose sharply last week from the prior week’s ending value of 4.78% to 4.94% for a 30-year fixed-rate loan, according to Mortgage News Daily. As of Tuesday night, top-tier borrowers are looking at a rate of 4.96%, a drop of four basis points week over week. The yield on a 10-year U.S. Treasury note has moved lower, from 3.21% last Tuesday to 3.16% last night. A year ago the 10-year note yielded 2.3%.
On an unadjusted basis, the MBA’s composite index fell by 7% week over week. The seasonally adjusted purchase index decreased by 6% compared with the week ended October 5. The unadjusted purchase index also fell by 6% for the week and was 2% higher year over year.
The MBA’s refinance index decreased by 9% week over week and the percentage of all new applications that were seeking refinancing dropped from 39.0% to 38.1%.
Adjustable rate mortgage loans accounted for 7.1% of all applications, down 0.2 points compared with the prior week.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 5.05% to 5.10%, its highest level since February 2011. The rate for a jumbo 30-year fixed-rate mortgage ticked down from 4.99% to 4.989%. The average interest rate for a 15-year fixed-rate mortgage increased from 4.44% to 4.50%, its highest level since February 2011.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 4.29% to 4.34%, the highest level since the MBA series began in 2011. Rates on a 30-year FHA-backed fixed rate loan ticked up from 4.98% to 4.99%, the highest level since April 2011.