Interest rates for 30-year fixed mortgages hit highs not seen since 2011, and that has caused home-loan applications to slide.
Mortgage applications decreased 2.6 percent from one week earlier, according to just-released data from the Mortgage Bankers Association for the week ending May 18, 2018. Higher rates has hurt demand for refinancing existing mortgages. The MBA’s Refinance Index decreased 4 percent from the previous week to its lowest level since December 2000.
Additionally, the refinance share of mortgage activity decreased to 35.7 percent of total applications from 35.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.8 percent of total applications.
The FHA share of total applications remained unchanged at 10.3 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since April 2011, 4.86 percent, from 4.77 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 $453,100) increased to its highest level since September 2013, 4.81 percent from 4.73 percent, for 80 percent LTV loans.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since May 2011, 4.90 percent from 4.78 percent for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since February 2011, 4.31 percent from 4.20 percent for 80 percent LTV loans.
The MBA data is based on a survey that covers over 75 percent of all U.S. retail residential mortgage applications.