Lower Interest Rates Make Mixed Moves, New Mortgage Applications Increase
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 2.7% in the group’s seasonally adjusted composite index for the week ending May 3. Mortgage interest rates decreased on two of five types of loans the MBA tracks.
On an unadjusted basis, the MBA’s composite index rose by 3% in the past week. The seasonally adjusted purchase index increased by 4% compared with the week ended April 26. The unadjusted purchase index rose by 5% for the week and was 5% higher year over year.
Mortgage loan rates for a top-tier 30-year fixed-rate loan increased slightly to 4.29% last week, according to Mortgage News Daily. As of Tuesday night, top-tier borrowers were paying 4.20% for that loan. The yield on a 10-year U.S. Treasury note slipped last week from 2.50% to 2.45% as of last night’s close. A year ago, the 10-year note yielded 2.95%.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said:
We saw a good week for the spring homebuying season, as a 5 percent increase in purchase applications – both weekly and year-over-year – drove the results. Average loan amounts also stayed elevated, with government purchase applications rising to the highest in the survey. Even with slower price appreciation in higher-priced markets, home prices are still rising enough to push average loan sizes higher.
The S&P CoreLogic Case-Shiller national home price index showed that U.S. home prices are still rising, but at the slowest pace since October of 2012.
The MBA’s refinance index increased by 4% week over week, and the percentage of all new applications that were seeking refinancing dropped from 38.8% to 37.9%.
Adjustable rate mortgage loans accounted for 6.4% of all applications, up 0.2 percentage 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 ticked down from 4.42% to 4.41%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.31% to 4.27%. The average interest rate for a 15-year fixed-rate mortgage remained unchanged at 3.81%.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.81% to 3.88%. Rates on a 30-year FHA-backed fixed rate-loan increased from 4.39% to 4.44%.