Applications Fall Amid Interest Rate Jumps in MBA Weekly Survey
Mortgage applications fell last week as key interest rates jumped–in some cases, to their highest level in seven years–the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending January 26.
The Market Composite Index decreased by 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 12 percent compared to the previous week.
The Refinance Index decreased by 3 percent from the previous week. The refinance share of mortgage activity decreased to 47.8 percent of total applications, its lowest level since August, from 49.4 percent the previous week.
The seasonally adjusted Purchase Index decreased by 3 percent from one week earlier. The unadjusted Purchase Index increased by 15 percent compared to the previous week and was 10 percent higher than the same week one year ago.
The FHA share of total applications decreased to 10.7 percent from 11.4 percent the week prior. The VA share of total applications decreased to 10.1 percent from 10.9 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent.
“Rates moved higher last week driven by concerns over a weaker U.S. dollar, signs of more robust growth and rising rates abroad and moderately strong fourth quarter domestic growth,” said MBA Economist Joel Kan.
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 March, 4.41 percent, from 4.36 percent, with points increasing to 0.56 from 0.54 (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 March, 4.34 percent, from 4.31 percent, with points increasing to 0.40 from 0.38 (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 September 2013, 4.40 percent, from 4.37 percent, with points increasing to 0.68 from 0.65 (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, 3.85 percent, from 3.81 percent, with points increasing to 0.60 from 0.52 (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 increased to its highest level since March 2011, 3.79 percent, from 3.70 percent, with points increasing to 0.41 from 0.39 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The ARM share of activity increased to 5.7 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.
