Lower Mortgage Interest Rates Slow Drop in Applications

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.

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