Mortgage Loan Rates Fall to 16-Month Low

Housing

Published: January 21, 2015 7:25 am

Last Updated: April 28, 2020 2:06 am

The Mortgage Bankers Association (MBA) released its most recent report on mortgage applications Wednesday morning. It noted a week-over-week increase of 14.2% in the group’s seasonally adjusted composite index for the week ending January 16, following a rise of 49.1% for the two-week period ending January 9. Mortgage loan rates dropped on all types of loans for the third consecutive reporting period and are now at levels equal to mid-2013.

On an unadjusted basis, the composite index increased by 17% week-over-week. The seasonally adjusted purchase index decreased 3% compared to the week ended January 2. The unadjusted purchase index rose by 3% for the week and is now 3% higher year-over-year.

The MBA’s chief economist explained:

Mortgage application volume increased last week to its highest level since June 2013, led by a 22 percent increase in refinance application volume. This increase was largely due to mortgage rates dropping to their lowest level since May 2013. However, the recent reduction in FHA mortgage insurance premiums also played a role: FHA refinance applications increased 57 percent last week.

Adjustable rate mortgage loans accounted for 6.4% of all applications, up from 5.9% in the prior week.

The MBA’s refinance index increased 22% week-over-week, and the percentage of all new applications that were seeking refinancing rose from 71% in the prior week to 74%.

Conventional refinancing applications rose 21% week-over-week, while government refinancing rose 29%. FHA refinancing applications rose 57%, raising the FHA share of all refinancings from 4.1% to 5.2%, compared with the prior week.

The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 3.89% to 3.80%, the lowest rate since May 2013. The rate for a jumbo 30-year fixed-rate mortgage decreased from 3.88% to 3.86%, also the lowest since May 2013. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.16% to 3.10%, again the lowest since May 2013.

The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 2.94% to 2.87%, the lowest since June 2013. Rates on a 30-year FHA-backed fixed rate loan fell from 3.71% to 3.66%, the lowest rate since May 2013.

ALSO READ: Homebuilder Confidence Drops as Outlook Dims for New Sales

100 Million Americans Are Missing This Crucial Retirement Tool

The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.

Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.

A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.

Click here to learn how to get a quote in just a few minutes.