The seasonally adjusted purchase index decreased by 6% from the prior week’s report. On an unadjusted basis, the composite index decreased by 2% week-over-week. The unadjusted purchase index also decreased by 2% for the week, and it is 17% lower year-over-year.
Adjustable rate mortgage loans account for 8% of all applications, unchanged from a week ago.
The MBA’s refinance index decreased by 3%, after declining by 0.2% in the previous week. The share of refinancings fell by a point to 61% of all applications.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.45% to 4.50%. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.40% to 4.45%. The average interest rate for a 15-year fixed-rate mortgage rose from 3.49% to 3.55%.
The contract interest rate for a 5/1 adjustable rate mortgage loan fell from 3.11% to 3.20%.
The purchase index is at its lowest point since September 2011. Higher interest rates are slowing down refinancing, and the cold weather probably has had some impact as well. But there is something else at work as well.
Since home prices reached their low point in February of 2012, real home prices have risen by 17% and borrowing costs (interest plus lenders’ fees) are up 26%. As Fed tapering continues, interest rates should continue to rise, and that is very likely to have a negative impact on first-time home buyers. This has not happened yet, but watch inventory levels — if they begin to rise sharply, that will not be good for buyers or sellers in the housing market.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.