Home >> Daily Dose >> Homebuying vs. Mortgage Apps
Print This Post Print This Post

Homebuying vs. Mortgage Apps

Higher rates and a tough buyers' market took impacted mortgage apps that declined 2.7 percent from the earlier week according to the Weekly Mortgage Application Survey by the MBA. On an unadjusted basis, the index decreased 3 percent.

The seasonally adjusted Purchase Index also decreased 2 percent during the week as did the unadjusted Purchase Index. The Refinance Index decreased 4 percent from the previous week to its lowest level since August 2008, the survey revealed. The refinance share of mortgage activity also decreased to 35.9 percent of total applications, its lowest level since August 2008. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.5 percent of total applications.

"Volatility in the rates is traditionally good for the market as it will push people off the fence but with the frustrations, with home demand, we may continue to see purchase applications drop and there is no doubt refinance applications are going to continue to grind down," said Brian Surgener, SVP Strategy, and Analytics at BBMC Mortgage.  "One item we need to keep an eye on is affordability."

The survey indicated that the FHA and USDA share of total applications increased to 10.3 percent and 0.8 percent respectively. On the other hand, the share of VA applications decreased to 10.3 percent from 10.1 percent in the earlier week.

The average contract interest rates for various mortgage loan applications were as follows:

  • For 30-year fixed rate mortgages with conforming balances, the rates decreased to 4.77 percent with the effective rate decreasing from last week.
  • Rates for 30-year fixed-rate mortgages with jumbo balances increased to 4.73 percent. The effective rate also increased compared to last week.
  • While the effective rate for 15-year fixed-rate mortgages increased from last week, the rates remained unchanged at 4.29 percent.
  • For FHA-backed 30-year fixed-rate mortgages the rates decreased to 4.78 percent with the effective rate also decreasing from last week.
  • The rate for 5/1 ARMs increased to their highest level in the history of the survey to 4.09 percent. The effective rates for these mortgages also increased during the week.

About Author: Radhika Ojha

Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. You can contact her at Radhika.Ojha@theMReport.com.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

x

Check Also

Homebuyers and Rising Interest Rates

With slower price gains forecast in the housing market, those looking to buy a home may feel their luck is changing. But how will interest rate hikes affect their mortgage payments?

GET THE NEWS YOU NEED, WHEN YOU NEED IT.

With daily content from MReport, you’ll never miss another important headline in originations, lending, or servicing. Subscribe to MDaily to begin receiving a complimentary daily email containing the top mortgage news and market information.