The Mortgage Bankers Association (MBA) released its report on mortgage applications Wednesday morning. It noted a week-over-week decrease of 3.3% in the group’s seasonally adjusted composite index for the week ending March 11. Mortgage loan rates increased on all loan types last week.
On an unadjusted basis, the composite index decreased by 3% week over week. The seasonally adjusted purchase index increased by 0.3% compared with the week ended March 4. The unadjusted purchase index increased by 1% for the week and is now 33% higher year over year.
The MBA’s refinance index decreased by 6% week over week, and the percentage of all new applications that were seeking refinancing fell from 56.7% to 55%.
Adjustable rate mortgage loans accounted for 4.9% of all applications, down from 5.2% in the previous week.
Wednesday’s Federal Open Market Committee (FOMC) announcement is likely to draw out an immediate reaction in the mortgage markets, according to Mortgage News Daily:
Most market participants do not expect the Fed to raise rates at this meeting, but if last October’s Fed Announcement was any indication, the Fed may use this opportunity to clearly telegraph its next move. In addition to the announcement itself, investors are anxious to see how the Fed’s economic projections have evolved in light of the market volatility seen during the 1st quarter. There’s no question that the average FOMC member will see fewer rate hikes in 2016, but if the Fed’s consensus is significantly different than the market consensus (which currently sees between 1 and 2 rate hikes by the end of the year), the market reaction will be bigger.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 3.89% to 3.94%. The rate for a jumbo 30-year fixed-rate mortgage increased from 3.81% to 3.86%. The average interest rate for a 15-year fixed-rate mortgage rose from 3.14% to 3.22%.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.20% to 3.23%. Rates on a 30-year FHA-backed fixed-rate loan rose from 3.71% to 3.77%.
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