On an unadjusted basis, the composite index increased by 5% week over week. The seasonally adjusted purchase index rose by 3% compared to the week ended July 24. The unadjusted purchase index also rose by 3% for the week and is now 23% higher year over year.
The MBA’s refinance index increased by 6% week over week, and the percentage of all new applications that were seeking refinancing rose slightly from 50.6% to 51.3%.
Adjustable rate mortgage loans accounted for 6.8% of all applications, up from 6.6% in the prior week.
Most mortgage lenders continue to quote 30-year fixed rate mortgages at 4% to the top-tier borrowers, although rates of 3.875% are available, according to Mortgage News Daily. Comments Monday by Atlanta Federal Reserve Bank President Dennis Lockhart pushed rates a little higher on Tuesday. Lockhart’s comments led some to believe that the Fed will raise its policy rate sooner, rather than later.
According to Mortgage Daily News:
A higher Fed rate makes short term money more expensive for large financial institutions, which ultimately affects how expensive long term money is when they lend it to you. Bottom line, the Fed doesn’t set mortgage rates, but if markets expect the first hike to happen sooner, mortgage rates will typically rise.
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According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage fell from 4.17% to 4.13%, its lowest level since May 15. The rate for a jumbo 30-year fixed-rate mortgage decreased from 4.12% to 4.08%, also the lowest rate since May. The average interest rate for a 15-year fixed-rate mortgage declined from 3.39% to 3.36%, also two-month low.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.04% to 3.02%, the lowest level since May. Rates on a 30-year FHA-backed fixed-rate loan dropped from 3.98% to 3.96%.
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