Mortgage Loan Rates Rise to Multiyear Highs

The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a week-over-week increase of 2.5% in the group’s seasonally adjusted composite index for the week ending December 16. Mortgage loan rates rose on all five types of loans over the past week.

On an unadjusted basis, the composite index increased by 2% week over week. The seasonally adjusted purchase index increased by 3% compared with the week ended December 9. The unadjusted purchase index decreased by 0.1% for the week, and it is now 1% higher year over year.

The MBA’s refinance index increased by 3% week over week, and the percentage of all new applications that were seeking refinancing rose from 57.2% to 57.9%.

Adjustable rate mortgage loans accounted for 6.5% of all applications, up from 6.2% the previous week.

[nativounit]

Compared with the prior week, the most prevalent rate offer on a 30-year fixed-rate conforming mortgage rose by 0.125% to 4.375%, according to Mortgage News Daily, which also noted that several lenders have reached 4.5%. Rates have barely moved for three straight days:

In general, lenders have rates set a bit higher than they otherwise would be during a more active time of year, and thus don’t need to worry about adjusting rates too much in either direction, unless [bond] markets make a much bigger move.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.28% to 4.41%, the highest rate since May 2014. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.29% to 4.36%, its highest level since April 2014. The average interest rate for a 15-year fixed-rate mortgage increased from 3.52% to 3.64%, the highest rate since January 2014.

The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.28% to 3.45%, its highest level since September 2013. Rates on a 30-year FHA-backed fixed-rate loan rose from 4.02% to 4.15%, its highest point since April 2014.

[wallst_email_signup]