Housing

Lower Mortgage Interest Rates Slow Drop in Applications

Housing development
Thinkstock
The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 1% in the group’s seasonally adjusted composite index. That followed a drop of 9.2% for the previous week. Mortgage loan rates slipped for all types of mortgage loans except 5/1 adjustable rate mortgages.

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 remains 18% 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 falling by 13% 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 4.36% to 4.33%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.32% to 4.28%. The average interest rate for a 15-year fixed-rate mortgage increased from 3.5% to 3.47%.

The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.2% to 3.23%. Rates on a 30-year FHA-backed fixed rate loan fell from 4.07% to 4.03%.

After two weeks of sharp declines in mortgage applications, last week’s small decline is welcome news. The drop in interest rates probably helped a little, as did rising inventories of homes for sale with modest month-over-month price increases.

ALSO READ: May Sales of Existing Homes Post Largest Gain in Three Years

Get Ready To Retire (Sponsored)

Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.

Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.

Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future

Get started right here.

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