Mortgage rates have remained unchanged over the past week and homebuyers are responding favorably to this more stable rate environment, according to Mike Fratantoni, SVP and Chief Economist at Mortgage Bankers Association [1](MBA).
The latest MBA Weekly Mortgage Applications Survey [2] revealed an increase in the measure of mortgage loan application volume by 5.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week, while the Refinance Index increased 5 percent from the previous week.
The volume of refinance loan applications decreased to 40.4 percent of total applications from 41.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.3 percent of total applications. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior, according to the report.
"Refinance application volume increased as well, with the index reaching its highest level in a month. Borrowers with larger loans tend to be more responsive for a given drop in rates, and competition for these loans is fierce. Therefore, it was not surprising to see the average rate for a 30-year fixed jumbo loan drop to its lowest level since January 2018," Fratantoni said.
Here’s how the average contract interest rates performed for various loans:
- For 30-year fixed-rate mortgages with conforming loan balances decreased to 4.65 percent from 4.66 percent.
- The rate for 30-year fixed-rate mortgages with jumbo loan balances decreased to 4.40 percent from 4.56 percent
- FHA-backed 30-year fixed-rate mortgages decreased to 4.64 percent from 4.68 percent
- The 15-year fixed-rate mortgages decreased to 4.00 percent from 4.04 percent
- The rate for 5/1 ARMs decreased to 3.95 percent from 4.00 percent
The effective rate for all loan types decreased with the exception of the average contract interest rate for 5/1 ARMs.