Mortgage rates that went up last week and changing market conditions impacted mortgage loan applications that trended downward during the week, decreasing 1.5 percent from the week earlier, according to the Weekly Mortgage Applications Survey released by the MBA.
On an unadjusted basis, the market composite index, a measure of loan application volume, decreased 9 percent compared with the previous week.
“The major factors driving buyer interest in the housing market, such as a strong economy and millennials who are aging into peak household forming years, are unchanged,” said Danielle Hale, Chief Economist at Realtor.com. “This means that changes in the number of applications are being driven by rate changes or changing market conditions.”
While the seasonally adjusted Purchase Index decreased 2 percent over the previous week, on an unadjusted basis purchase mortgage volumes increased 9 percent, but were 0.2 percent lower than the same week last year, the data indicated.
Though the refinance share of mortgage activity remained unchanged at 35.6 percent of total applications during the week, the refinance index decreased 2 percent over the previous week. The adjustable-rate mortgage (ARM) share of activity also saw a decline to 6.8 percent of total applications during the week.
For government loans, the FHA and VA share of loan applications increased to 10.6 percent and 10.7 percent respectively, while the USDA share of total applications remained unchanged at 0.8 percent.
Here’s how the average contract interest rates for various loans performed during the week:
- For 30-year fixed-rate mortgages with conforming loan balances as well as jumbo loan balances, rates increased to 4.83 percent and 4.74 percent respectively.
- Rates for FHA-backed 30-year fixed-rate mortgages rose to 4.83 percent from 4.77 percent.
- The 15-year fixed-rate mortgages increased to 4.23 percent from 4.21 percent in the previous week.
- The average rate for 5/1 ARMs increased to 4.11 percent from 4.08 percent last week.
- The effective interest rate for all loans increased from last week.