Falling Mortgage Rates Encouraging for Buyers, Refinancings

The seasonally adjusted purchase index decreased 3% from the prior week’s report. On an unadjusted basis, the composite index increased by 0.4% week-over-week. The unadjusted purchase index decreased by 3% for the week, but remains 12% lower year-over-year.

Adjustable rate mortgage loans account for 8% of all applications, unchanged from last week.

The MBA’s refinance index increased by 4%, after rising by 7% in the previous week. The share of refinancings rose from 50% to 52% of all applications.

The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.39% to 4.33%, the lowest rate since last November. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.29% to 4.24%, the lowest rate since May of 2013. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.48% to 3.43%, the lowest rate since last October.

The contract interest rate for a 5/1 adjustable rate mortgage loan slipped from 3.17% to 3.14%. Rates on a 30-year FHA-backed fixed rate loan fell from 4.09% to 4.06%, the lowest rate since last October.

Refinancing has picked up a little as the interest rates have come down to multi-month lows. Mortgage rates are still well below historical levels, even though they are about a point higher than the lows reached early in 2013.

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