Housing
Mortgage Loan Rates Moved Higher Last Week, Refinancings Jumped
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The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 9.6% in the group’s seasonally adjusted composite index for the week ending November 8. Mortgage interest rates rose on four of five loan types the MBA tracks.
On an unadjusted basis, the MBA’s composite index increased by 9% in the past week. The seasonally adjusted purchase index rose by 5% compared with the week ended November 1. The unadjusted purchase index rose by 2% for the week and was 15% higher year over year.
Mortgage loan rates for a top-tier 30-year fixed-rate loan inched up last week to 3.86%, according to Mortgage News Daily. The week-over-week yield on a 10-year U.S. Treasury note increased from 1.86% to 1.93% as of last night’s close. A year ago, the 10-year note yielded 3.14%.
Joel Kan, the MBA’s associate vice-president of economic and industry forecasting, said:
Mortgage applications increased to their highest level in over a month, as both purchase and refinance activity rose despite another climb in mortgage rates. Positive data on consumer sentiment, and growing optimism surrounding the U.S. and China trade dispute, were behind last week’s rise in the 30-year fixed mortgage rate to 4.03 percent. … With rates still in the 4 percent range, we continue to expect to see moderate growth in refinance activity in the final weeks of 2020.
The MBA’s refinance index increased by 13% week over week, and the percentage of all new applications that were seeking refinancing rose from 59.5% to 61.9%, a five-week high.
Adjustable-rate mortgage loans accounted for 4.9% of all applications, down 0.3 percentage points compared with the prior week.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 3.98% to 4.03%. The rate for a jumbo 30-year fixed-rate mortgage ticked up from 3.97% to 3.98%. The average interest rate for a 15-year fixed-rate mortgage rose from 3.38% to 3.43%.
The contract interest rate for a 5/1 adjustable-rate mortgage loan dipped from 3.43% to 3.40%. Rates on a 30-year FHA-backed fixed-rate loan increased from 3.79% to 3.85%.
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