Mortgage rates crept higher during the week ended September 16, and mortgage applications, while rebounding from the previous holiday-shortened prior week, were down significantly on a seasonally adjusted basis.
The Mortgage Bankers Association said its seasonally adjusted Market Composite Index, a measure of mortgage applications volume, was down 7.3 percent from the previous week in which data had included an adjustment for the Labor Day holiday. On an unadjusted basis, the Index was up by 15 percent.
The Refinance Index fell 8 percent and was at its lowest level since June. Still the share of mortgage applications that were for refinancing increased to 63.1 percent from 62.9 percent.
The seasonally adjusted Purchase Index dropped 7 percent but the unadjusted version rose 15 percent and was 3 percent higher than during the same week in 2015.
The FHA share of total applications increased to 10.2 percent from 9.6 percent and the VA share was down to 11.6 percent from 12.0 percent. USDA's share was unchanged at 0.7 percent.
Interest rates, both contract and effective ended the week higher than during the period ended September 9. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) increased to the highest level since June 2016, 3.70 percent, up from 3.67 percent. Points increased to 0.38 from 0.36.
The average contract interest rate for 30-year FRM with jumbo loan balances (greater than $417,000) rose 5 basis points to 3.69 percent. Points were lower, 0.29 compared to 0.36, than a week earlier.
FHA-backed 30-year FRM had an average rate of 3.56 percent with 0.23 point. A week earlier the rate was 3.50 percent with 0.27 point.
The average contract interest rate for 15-year FRM increased to 2.99 percent from 2.97 percent. Points increased to 0.35 from 0.34
The adjustable-rate mortgage (ARM) share of activity decreased to 4.4 percent of total applications from 4.6 percent a week earlier. The average rate for 5/1 ARMs jumped 9 basis point to 2.96 percent from 2.87 percent but points fell to 0.26 from 0.37.
MBA's Weekly Mortgage Applications survey covers over 75 percent of all U.S. retail residential mortgage applications. It has been conducted since 1990 with respondents that include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information is for loans with an 80 percent loan-to-value ratio and points that include the origination fee.