Mortgage applications decreased 0.1% from one week earlier as conforming and jumbo interest rates climbed back above 4%, which slowed refinance activity, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending Sept. 13 found that the refinance index decreased 4%
"The jump in U.S. Treasury rates at the end of last week caused mortgage rates to increase across the board, with the 30-year fixed-rate mortgage climbing to 4.01% — the highest in seven weeks," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Refinancing activity dropped as a result, driven solely by conventional refinances."
Although refi activity slowed, homebuyers remained active, as the seasonally adjusted purchase index increased 6% from one week earlier. On an unadjusted basis, the purchase index increased 16% compared with the previous week and was 15% higher than the same week one year ago.
"The purchase index increased for the third straight week to the highest reading since July," Kan said. "Additionally, the average loan amount on purchase applications increased to its highest level since June. This is a likely a sign that the underlying demand for buying a home remains strong, despite some of the recent volatility we have seen."
Although it is still a predominantly refi market, its share of new application activity decreased to 57.9% of the total volume from 60% the previous week.
Adjustable-rate mortgage activity decreased to 5% from 5.6% of total applications and the share of Federal Housing Administration-insured loan applications increased to 10.9% from 9.3% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 12.7% from 11.9% and the U.S. Department of Agriculture/Rural Development share increased to 0.6% from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.01% from 3.82%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate increased to 4.01% from 3.84%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.89% from 3.76%. For 15-year fixed-rate mortgages, the average increased to 3.42% from 3.28%. The average contract interest rate for 5/1 ARMs increased 12 basis points to 3.54%.
