Lower Interest Rates Failed to Raise New Mortgage Applications Last Week
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 0.6% in the group’s seasonally adjusted composite index for the week ending May 10. Mortgage interest rates decreased on all five types of loans the MBA tracks.
On an unadjusted basis, the MBA’s composite index dipped by 1% in the past week. The seasonally adjusted purchase index also decreased by 1% compared with the week ended May 3. The unadjusted purchase index slipped by 1% for the week and was 7% higher year over year.
Mortgage loan rates for a top-tier 30-year fixed-rate loan decreased slightly to 4.24% last week, according to Mortgage News Daily. As of Tuesday night, top-tier borrowers were paying 4.18% for that loan. The yield on a 10-year U.S. Treasury note slipped last week from 2.45% to 2.41% as of last night’s close. A year ago, the 10-year note yielded 3.0%.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said:
Purchase applications declined slightly last week but still remained almost 7 percent higher than a year ago. Despite the third straight decline in mortgage rates, refinance applications decreased for the fifth time in six weeks, albeit by less than 1 percent. It’s worth watching if ongoing global trade disputes lead to increased anxiety about the economy, which could cause some potential homebuyers to put off their home search until the uncertainty is resolved.
The MBA’s refinance index decreased by 1% week over week, and the percentage of all new applications that were seeking refinancing remained unchanged at 37.9%.
Adjustable rate mortgage loans accounted for 6.3% of all applications, down 0.1 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 4.41% to 4.40%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.27% to 4.24%. The average interest rate for a 15-year fixed-rate mortgage dropped from 3.81% to 3.78%.
The contract interest rate for a 5/1 adjustable rate mortgage loan fell from 3.88% to 3.82%. Rates on a 30-year FHA-backed fixed-rate loan decreased from 4.44% to 4.32%.
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