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.