The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 3.3% in the group’s seasonally adjusted composite index for the week ending May 24. Mortgage interest rates decreased or stayed the same on four of five types of loans the MBA tracks.
On an unadjusted basis, the MBA’s composite index fell by 4% in the past week. The seasonally adjusted purchase index decreased by 1% compared with the week ended May 17. The unadjusted purchase index slipped by 3% for the week and was 7% higher year over year.
Mortgage loan rates for a top-tier 30-year fixed-rate loan decreased from 4.15% to 4.05% last week, according to Mortgage News Daily. As of Tuesday night, top-tier borrowers were paying 4.03% for that loan. The yield on a 10-year U.S. Treasury note dropped last week from 2.43% to 2.27% as of last night’s close. A year ago, the 10-year note yielded 2.93%.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said:
Concerns over European economic growth and ongoing uncertainty about a trade war with China were some of the main factors that kept mortgage rates low last week. Even with lower rates on three of the five surveyed loan types, refinance activity fell 6 percent, essentially reversing an 8 percent increase the week before. … It is possible that the trade dispute is causing potential homeowners to hold off on buying, with the fear that further escalation – or the lack of resolution – may have adverse impacts on the economy and housing market.
The MBA’s refinance index decreased by 6% week over week, and the percentage of all new applications that were seeking refinancing fell from 40.5% to 39.7%.
Adjustable rate mortgage loans accounted for 6.6% of all applications, down 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 remained unchanged at 4.33%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.24% to 4.18%. The average interest rate for a 15-year fixed-rate mortgage dropped from 3.78% to 3.73%.
The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.57% to 3.74%. Rates on a 30-year FHA-backed fixed-rate loan ticked down from 4.34% to 4.33%.