Rising Interest Rates See Mortgage Applications Decline

A rise in mortgage interest rates saw mortgage applications decrease 2.6 percent from one week earlier, according to data from MBA Weekly Mortgage Applications Survey released on Wednesday. The survey covered data for the week ending January 26.

The Refinance Index decreased 3 percent from the previous week, while the seasonally adjusted Purchase Index decreased 3 percent from a week earlier. On the other hand the refinance share of mortgage activity decreased to 47.8 percent of total applications, its lowest level since August 2017, from 49.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications.

Other highlights from the survey:

• The FHA share of total applications decreased to 10.7 percent from 11.4 percent last week. The VA share of total applications decreased to 10.1 percent from 10.9 percent last week while the USDA share of total applications remained unchanged at 0.8 percent.
• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to At 4.41 percent, its highest level since March 2017, from 4.36 percent, with points increasing to 0.56 from 0.54 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) increased to 4.34 percent, its highest level since March 2017, from 4.31 percent, with points increasing to 0.40 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.40 percent, its highest level since September 2013, from 4.37 percent, with points increasing to 0.68 from 0.65 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages increased to 3.85 percent, its highest level since April 2011, from 3.81 percent, with points increasing to 0.60 from 0.52 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
• The average contract interest rate for 5/1 ARMs increased to 3.79 percent, its highest level since March 2011, from 3.70 percent, with points increasing to 0.41 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.