There is little doubt that the shutdown has had an affect on the mortgage industry as purchase applications for government-sponsored programs dropped by more than 7 percent last week to their lowest level since December 2007, according to the Mortgage Bankers Association.
The government share of purchase applications dropped to its lowest level in almost three years
Overall, all mortgage applications increased 0.3 percent from one week earlier, the MBA said for the week ending October 11, 2013.
The refinance component increased 3 percent from the previous week. The purchase component decreased 5 percent from one week earlier.
“The government shutdown had a notable impact on the mortgage market last week,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “The conventional purchase applications dropped as well…falling almost 4 percent for the week,”
The refinance share of mortgage activity increased to 66 percent of total applications from 64 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6 percent of total applications.
Here’s an overview of mortgage rates:
- The average contract interest rate for 30-year fixed-rate mortgages, with conforming loan balances ($417,000 or less), increased to 4.46 percent from 4.42 percent for 80 percent loan-to-value ratio (LTV) loans.
- The average contract interest rate for 30-year fixed-rate mortgages, with jumbo loan balances (greater than $417,000), increased to 4.51 percent from 4.45 percent for 80 percent LTV loans.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration increased to 4.16 percent from 4.15 percent for 80 percent LTV loans.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 3.53 percent from 3.52 percent for 80 percent LTV loans. The effective rate increased from last week.