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Applications for mortgages decreased as mortgage interest rates rose to recent highs during the week ended March 8.  The Mortgage Bankers Association's (MBA) Market Composite Index, a measure of application volume, was down 4.7 percent on a seasonally adjusted basis from the previous week and 4.0 percent on an unadjusted basis. 

The Refinance Index was down 5 percent compared to the week ended March 1 and the refinance share of mortgage activity decreased to 76 percent of total applications from 77 percent, the lowest share of refinancing applications since May 2012.  Thirty percent of those applications were for Home Affordable Mortgage's (HARP), up from 28 percent the previous week.  The seasonally adjusted Purchase Index was down 3 percent while the unadjusted index was down 1 percent from the prior week and was 9 percent higher than one year earlier. 

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

"The announcement of stronger than anticipated job growth last week led to an increase in interest rates, with the 30 year fixed mortgage rate in our survey reaching the highest level in more than six months," said Mike Fratantoni, MBA's Vice President of Research and Economics.  "Refinance applications declined as a result, but remain high given the steady flow of HARP applications."

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,500 or less) jumped to 3.81 percent, the highest rate since August 2012, from 3.70 percent, with points unchanged at 0.39.  The effective rate for this and all products increased from the previous week.

The average rate for 30-year FRM with jumbo loan balances (greater than $417,500) rose 10 basis points to 3.90 percent with points increasing to 0.46 from 0.37. 

The rate for 30-year FHA-backed FRM increased to 3.53 percent with 0.38 point from 3.47 percent with 0.33 point.

The average rate for 15-year fixed-rate mortgages increased to 3.01 percent from 2.96 percent, with points increasing to 0.42 from 0.36.

Applications for adjustable rate mortgages (ARMs) rose above 4 percent for the first time in months, hitting a 5 percent share of application volume.  The average contract interest rate for 5/1 ARMs increased to 2.62 percent from 2.55 percent, with points decreasing to 0.33 from 0.37.

All rates quoted are for loans with loan-to-value ratios of 80 percent and points include the origination fee.

MBA's Weekly Application Survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.

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