Applications Down As Rates Hit 4-Year High in MBA Weekly Survey
Mortgage applications fell last week as interest rates jumped to their highest level in more than four years, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending February 16.
The Market Composite Index decreased by 6.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 3 percent compared to the previous week.
The Refinance Index decreased by 7 percent from the previous week. The refinance share of mortgage activity decreased to its lowest level since July, 44.4 percent, from 46.5 percent the previous week.
The seasonally adjusted Purchase Index decreased by 6 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared to the previous week and was 3 percent higher than the same week one year ago.
The FHA share of total applications decreased to 9.9 percent from 10.1 percent the week prior. The VA share of total applications decreased to 10.0 percent from 10.1 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.
“The drumbeat continues,” said MBA Chief Economist Mike Fratantoni. “Inflation is increasing, as are deficits, and the economy and job market continue to look strong, and rates are higher as a result. With mortgage rates at four-year highs, it’s no surprise to see app volume fall off a bit as a result. Purchase applications are still running about 3 percent ahead of last year at this time, but this upward move in rates is coming right at the start of the spring buying season, and is a headwind.”
MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since January 2014, 4.64 percent, from 4.57 percent, with points increasing to 0.61 from 0.59 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) increased to its highest level since January 2014, 4.62 percent, from 4.55 percent, with points increasing to 0.50 from 0.47 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by FHA increased to its highest level since April 2011, 4.58 percent, from 4.54 percent, with points decreasing to 0.71 from 0.73 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since April 2011, 4.02 percent, from 4.00 percent, with points increasing to 0.66 from 0.65 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 3.72 percent from 3.74 percent, with points increasing to 0.39 from 0.37 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The ARM share of activity increased to 6.4 percent of total applications.
The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
