Housing

Mortgage Applications Declined Last Week

New home
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The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a drop of 8.1% in the group’s seasonally adjusted composite index, following a rise of 7% for the previous week.

The seasonally adjusted purchase applications index fell by 2% from the last report. On an unadjusted basis, the composite index fell 17% week-over-week. Year-over-year the unadjusted purchase index is up 2%.

The share of refinancings dropped from a rate of 82%, about where it has been for months, to a rate of 79%. That may be due to the slight rise in interest rates, but the very low rates also could be attracting more buyers.

The average contract interest rate for a conforming 30-year fixed-rate mortgage rose from 3.62% to 3.67%. The rate for a jumbo 30-year fixed-rate mortgage increased, from 3.85% to 3.95%. The average interest rate for a 15-year fixed-rate mortgage fell from 2.87% to 2.95%.

The contract interest rate for a 5/1 adjustable rate mortgage decreased from 2.61% to 2.60%.

The drop in new household formation that began during the financial crisis of 2009 may finally be over. Home prices are rising as more buyers come into the market and mortgage interest rates are rising a bit as well.

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