The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 1.8% in the group’s seasonally adjusted composite index for the week ending April 14. During the week, mortgage loan rates decreased to their lowest levels since last November on all loan types.
On an unadjusted basis, the composite index decreased by 2% week over week. The seasonally adjusted purchase index decreased by 3% compared with the week ended April 7. The unadjusted purchase index also decreased by 3% for the week and is now 1% lower year over year.
The MBA’s refinance index increased by just 0.2% week over week, and the percentage of all new applications that were seeking refinancing rose from 41.6% to 42.4%.
Adjustable rate mortgage loans accounted for 8.4% of all applications, down just 0.1 percentage point compared with the prior week.
The supply of homes for sale in the United States has reached its lowest point in more than 10 years, according to Freddie Mac. Unless the situation improves, home sales in 2017 will decline from the 10-year high posted in 2016.
More existing homeowners are staying put because of the inventory shortage and because interest rates are creeping up. That means they are not selling their homes, further crimping inventories. Mortgage Daily News’ Jann Swanson sums it up:
While full employment and rising inflation are signs of a strong economy, they also have the potential to push mortgage rates and house prices up. The higher rates and higher home prices (up 5.8 percent on an annual basis in January) create significant affordability concerns, which may continue to characterize the housing market for the rest of 2017.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.28% to 4.22%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.24% to 4.15%. The average interest rate for a 15-year fixed-rate mortgage dropped from 3.51% to 3.50%.
The contract interest rate for a 5/1 adjustable-rate mortgage loan decreased from 3.33% to 3.27%. Rates on a 30-year FHA-backed fixed-rate loan fell from 4.14% to 4.09%.
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