On an unadjusted basis, the composite index decreased by 4% week-over-week. The seasonally adjusted purchase index rose 1% compared to the week ended April 24. The unadjusted purchase index increased by 2% for the week and is now 12% higher year-over-year.
The MBA’s refinance index decreased 8% week-over-week, and the percentage of all new applications that were seeking refinancing dropped from 55% to 53%.
The decline in refinancing activity continues, and even though mortgage rates remain below 4% on all popular loan types, an increase in refinancing is unlikely until rates fall below 3.5%.
To underscore that point, a report on Tuesday from Mortgage Daily News noted that several major lenders are now charging mortgage rates of 4%, and that at that time only a single day so far this year has seen mortgage rates any higher. Keep an eye on Friday’s employment report. If the numbers are solidly above expectations, look for mortgage rates to continue rising. If the numbers are weak, rates could well pull back.
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Adjustable rate mortgage loans accounted for 6.1% of all applications, up from 5.7% in the prior week.
The FHA share of all applications rose from 13.7% a week ago to 14.0%, and the VA share increased from 11.3% to 11.9%.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 3.85% to 3.93%. The rate for a jumbo 30-year fixed-rate mortgage increased from 3.82% to 3.91%. The average interest rate for a 15-year fixed-rate mortgage rose from 3.14% to 3.19%.
The contract interest rate for a 5/1 adjustable rate mortgage loan fell from 2.88% to 2.87%. Rates on a 30-year FHA-backed fixed rate loan rose from 3.66% to 3.70%.
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