Housing

Mortgage Rates Drop, So Do Applications

Townhouses
Thinkstock
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning. It noted a decrease of 3.1% in the group’s seasonally adjusted composite index, following a drop of 1.2% for the previous week. Mortgage loan rates fell again last week for all types of mortgage loans.

The seasonally adjusted purchase index decreased 4% from the prior week’s report. On an unadjusted basis, the composite index decreased by 14% week-over-week. The unadjusted purchase index decreased by 15% for the week and remains 17% 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 3%, after rising by 1% in the previous week. The share of refinancings rose from 52% to 53% of all applications.

The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.31% to 4.26%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.23% to 4.22%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.42% to 3.39%.

The contract interest rate for a 5/1 adjustable rate mortgage loan slipped from 3.13% to 3.11%. Rates on a 30-year FHA-backed fixed rate loan fell from 4.04% to 3.99%.

Small decreases in mortgage loan rates continue, and that appears to be encouraging to refinancings, although it is unlikely that we will see the return to percentages around 80% as we saw early in 2013. Home prices continue to rise, although the increases are getting smaller as inventory levels increase.

ALSO READ: Housing Survey Confirms: Americans Still Worried

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.