Mortgage Rates Continue Dropping, but Fewer Borrowers in Line

The seasonally adjusted purchase index decreased 1% from the prior week’s report. On an unadjusted basis, the composite index decreased by 2% week-over-week. The unadjusted purchase index decreased by 2% for the week, and it remains 15% lower year-over-year.

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

The MBA’s refinance index decreased by 1%, after rising by 4% in the previous week. The share of refinancings remained unchanged at 52% of all applications.

The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.33% to 4.31%, the lowest rate since last June of last year. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.24% to 4.23%, also the lowest rate since June 2013. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.43% to 3.42%, the lowest rate since last October.

The contract interest rate for a 5/1 adjustable rate mortgage loan slipped from 3.14% to 3.13%. Rates on a 30-year FHA-backed fixed rate loan fell from 4.06% to 4.04%, the lowest rate since last June.

Interest rates continue slipping downward, although the change is more modest this week than in either of the past two weeks. Refinancings have stabilized above 50% again, but with interest rates about a full percentage point higher than a year ago, it is unlikely that we will see a big burst of activity here.

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