Mortgage Rates Fall, Applications Rise

The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting an increase of 4.5% in the group’s seasonally adjusted composite index following a decline of 4% for the previous week.

The seasonally adjusted purchase index fell by 1% from the last report. On an unadjusted basis, the composite index rose by 5% week-over-week. The unadjusted purchase index slipped 1% for the week and is up 3% year-over-year.

The share of refinancings rose last week, from 74% to 75%.

The average contract interest rate for a conforming 30-year fixed-rate mortgage fell from 3.76% to 3.68%. The rate for a jumbo 30-year fixed-rate mortgage decreased, from 3.85% to 3.79%. The average interest rate for a 15-year fixed-rate mortgage remained fell from 2.99% to 2.92%.

The contract interest rate for a 5/1 adjustable rate mortgage rose from 2.6% to 2.58%.

The week was virtually a complete turnaround from the prior week. Rates fell and applications were up, and an MBA executive offered this explanation:

Following the April 1 increase in FHA mortgage insurance premiums, government purchase applications fell by almost 14 percent, to their lowest level since February 2013. On the other hand, applications for conventional purchase loans increased by more than 5 percent, bringing the conventional purchase index to its highest level since October 2009 and the highest level since the expiration of the homebuyer tax credit. With these changes, the government share of all purchase loans fell to 30 percent, the lowest level since we began tracking this series in 2011.