Mortgage Applications for Purchases, Refinances Jump 9% as Rates Steadily Climb

Mortgage Applications Jump 9% as Rates Steadily ClimbMortgage applications jumped a healthy 9.4 percent last week from one week earlier, reversing a recent trend of mostly declining volume, the Mortgage Bankers Association reported Wednesday.
It’s no coincidence that the spike in applications come in the wake of higher mortgage rates, which have been climbing — albeit in small increments — for a month.
Rising rates typically pull in home hunters and investors alike from the sidelines, where they may have been waiting for rates to decline as questions linger regarding the strength of the U.S. economy.
The bankers’ Market Composite Index, a measure of mortgage loan application volume for both purchases and refinances, increased 9.4 percent on a seasonally adjusted basis from one week earlier.
The refinance component increased 10 percent from the previous week. The purchase component jumped 9 percent from one week earlier.
The previous week’s results did not include an adjustment for the Presidents’ Day holiday.
The seasonally-adjusted purchase component was 6 percent higher than its level two weeks earlier, but was still 19 percent lower than the same week one year ago.
Despite the increase observed this week, the Refinance Index is still 3 percent lower than it was two weeks ago.
The refinance share of mortgage activity decreased to 57.7 percent of total applications from 58 percent the previous week , its lowest level since early September of 2013.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8 percent of total applications.
The average contract interest rate for 30-year fixed-rate mortgages, with conforming loan balances ($417,000 or less), decreased to 4.47 percent from 4.53 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), decreased to 4.37 percent from 4.47 percent, for 80 percent LTV loans.

Leave a Reply

Your email address will not be published. Required fields are marked *