On an unadjusted basis, the composite index decreased by 2% week over week. The seasonally adjusted purchase index dropped 4% compared to the week ended May 8. The unadjusted purchase index also dropped 4% for the week but remained 11% higher year-over-year.
The MBA’s refinance index increased 0.3% week over week, and the percentage of all new applications that were seeking refinancing rose from 51% to 52%.
The MBA’s chief economist said:
Mortgage rates increased last week, and Treasury rates increased to a recent high at mid week before falling at the end of the week. Overall purchase activity fell for the week, along with conventional refinance volume, but government refinance volume increased. The level of purchase applications remained 11 percent higher than the same week last year, but the drop this week may indicate borrowers being wary of the recent run up in mortgage rates.
The Federal Reserve announcement due out Wednesday afternoon may have more than its usual nominal impact on mortgage loan rates as everyone tries to read the tea leaves concerning the Fed’s first rate hike in more than six years. According to Mortgage News Daily, the average lender is currently quoting a conventional 30-year rate of 4% for top-tier borrowers.
ALSO READ: 10 Reasons the Federal Reserve Cannot Panic on Interest Rate Hikes
Adjustable rate mortgage loans accounted for 6.4% of all applications, up from 6.3% in the prior week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.00% to 4.04%, its highest level since December. The rate for a jumbo 30-year fixed-rate mortgage increased from 3.99% to 4.04%. The average interest rate for a 15-year fixed-rate mortgage rose from 3.23% to 3.26%.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.00% to 2.99%. Rates on a 30-year FHA-backed fixed rate loan rose from 3.76% to 3.8%.
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