Housing
Mortgage Loan Rates Dropped Last Week, Applications Up 21%
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The Mortgage Bankers Association (MBA) released its latest report on mortgage applications Wednesday morning. The report noted a week-over-week increase of 21.3% in the group’s seasonally adjusted composite index for the week ending January 8. Results for the prior week had been adjusted to account for the New Year’s Day holiday. Mortgage loan rates decreased on all types of loans during the week.
On an unadjusted basis, the composite index increased by 76% week over week. The seasonally adjusted purchase index increased by 18%, compared with the week ended January 1. The unadjusted purchase index increased by 74% for the week and is now 19% higher year over year.
The MBA’s refinance index increased by 24% week over week, and the percentage of all new applications that were seeking refinancing rose from 55.4% to 55.8%.
Adjustable rate mortgage loans accounted for 5.1% of all applications, up from 4.7% in the previous week.
The MBA’s vice-president of research and economics said:
MBA’s purchase mortgage application index reached its second highest level since May 2010 on a seasonally adjusted basis last week, second only to the week prior to the implementation of the Know Before You Owe rules.
Bolstered by strong fourth quarter growth in jobs and continuing low rates, the results are similar to levels we saw in early December, suggesting that the purchase market’s strong finish to 2015 may be continuing. While refinances also increased on a holiday-adjusted basis, refinance activity was down 38 percent relative to a year ago when rates dove below 4 percent.
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According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.20% to 4.12%. The rate for a jumbo 30-year fixed-rate mortgage decreased from 4.09% to 4.02%. The average interest rate for a 15-year fixed-rate mortgage fell from 3.47% to 3.42%.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.19% to 3.14%. Rates on a 30-year FHA-backed fixed-rate loan fell from 3.95% to 3.90%.
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