The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 1.9% in the group’s seasonally adjusted composite index for the week ending July 19. Mortgage interest rates decreased on all five types of loans the MBA tracks.
On an unadjusted basis, the MBA’s composite index decreased by 2% in the past week. The seasonally adjusted purchase index also decreased by 2% compared with the week ended July 12. The unadjusted purchase index slipped by 1% for the week and was 6% higher year over year.
Mortgage loan rates for a top-tier 30-year fixed-rate loan dropped by about 0.7 percentage points to 3.88% last week, according to Mortgage News Daily. As of Tuesday night, top-tier borrowers were paying 3.83% for that loan. The week-over-week yield on a 10-year U.S. Treasury note dipped from 2.11% to 2.08% as of last night’s close. A year ago, the 10-year note yielded 2.96%.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said:
Mortgage rates right now are comparable to the average rate of 4.10 percent for June, but refinances last week were 7 percent lower than last month. This is an indication that as we see rates lower for longer, borrowers need more of a drop in rates to consider refinancing
The MBA’s refinance index decreased by 2% week over week, and the percentage of all new applications that were seeking refinancing slid from 50.0% to 49.8%.
Adjustable-rate mortgage loans accounted for 4.7% 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 fell from 4.12% to 4.08%. The rate for a jumbo 30-year fixed-rate mortgage decreased from 4.07% to 4.04%. The average interest rate for a 15-year fixed-rate mortgage slipped from 3.48% to 3.45%.
The contract interest rate for a 5/1 adjustable-rate mortgage loan ticked down from 3.58% to 3.57%. Rates on a 30-year FHA-backed fixed-rate loan dropped from 4.01% to 3.98%.