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Rising Interest Rates Curtail Mortgage Activity
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
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
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.
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.
quoted are for loans with loan-to-value ratios of 80 percent and points include
the origination fee.
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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