Rising Rates Impact Mortgage Applications

Higher mortgage interest rates continued to have an impact on mortgage applications according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 23rd, 2013.

The Market Composite Index, which measures mortgage loan application volume including purchase applications and refinance applications, declined 2.5 percent last week and follows a 4.6 percent decrease from the week before.

On an unadjusted basis, mortgage loan application volume fell three percent from the previous week after falling by five percent the week before.

Purchase Applications:

The seasonally adjusted Purchase Index increased by two percent after posting a one percent increase the week before. The unadjusted Purchase Index was 0.3 percent higher than the previous week and was six percent higher than during the same period last year.

Refinance Applications:

The Refinance Index declined by five percent from the previous week after falling eight percent the week before. Refinance activity has fallen by just over 64 percent since the beginning of May when mortgage interest rates began to climb. The refinance share of mortgage activity fell to 60 percent of total applications from 62 percent the week before.

Mortgage Interest Rates:
 

Average Contract Mortgages Rates
(80% loan-to-value)

Type of
Loan

Interest Rate (%)

Points

Effective Rate

Current

Previous

Current

Previous

30-Year FRM Conforming
($417,500 or less)

4.80

4.68

0.41

0.42

Increased

30-Year FRM Non-Conforming
($417,501 or more)

4.78

4.74

0.34

0.28

Increased

15-Year FRM

3.84

3.71

0.35

0.32

Increased

FHA 30-Year

4.52

4.40

0.35

0.21

Increased

5/1 ARM

3.50

3.44

0.37

0.48

Increased

 
The adjustable-rate mortgage (ARM) share of activity increased to around seven percent of total applications.

Tags: MBA, home purchase applications, mortgage rates, fixed rate mortgage, adjustable rate mortgage, refinance, interest rate, FHA mortgage rates

Source:
Mortgage Bankers Association

Reported by Chris Moore