The Mortgage Bankers Association (MBA) released its latest report on mortgage applications Wednesday morning. It noted a week-over-week increase of 7.2% in the group’s seasonally adjusted composite index for the week ending July 8. Mortgage loan rates once again fell on all types of loans this past week.
On an unadjusted basis, the composite index decreased by 14% week over week. The seasonally adjusted purchase index remained unchanged compared with the week ended July 1. The unadjusted purchase index decreased by 20% for the week and is now 5% lower year over year. Data were adjusted to account for the July Fourth holiday last week.
The MBA’s refinance index increased by 11% week over week, and the percentage of all new applications that were seeking refinancing rose from 61.6% to 64.0%.
Adjustable rate mortgage loans accounted for 5.2% of all applications, down from 5.6% in the previous week.
On Tuesday, Mortgage News Daily reported that most lenders have moved away from the 3.25% prevailing rate for the prior week and are now offering mortgage loan rates of 3.375% for top-tier borrowers. The report noted:
This is a battleground for mortgage rates at the moment, and it corresponds to levels in 10yr Treasury yields (even though rates are definitely NOT moving in lock step with Treasuries these days). Still, the mid 1.5% territory in 10yr yields is a bit of an inflection point for the overall rate market, and general trends in the overall rate market will influence the direction of mortgage rates.
If 10yr yields move much above 1.53, it would be taken by many as a sign of more weakness to come (read: higher rates). Conversely, if rates happen to hold their ground and move lower tomorrow, it would be a strong sign of commitment to the general range surrounding these long-term lows.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 3.66% to 3.60%, the lowest level since May 2013. The rate for a jumbo 30-year fixed-rate mortgage fell from 3.67% to 3.61%. The average interest rate for a 15-year fixed-rate mortgage decreased from 2.96% to 2.88%.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 2.85% to 2.78%. Rates on a 30-year FHA-backed fixed-rate loan dropped from 3.56% to 3.53%.
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