Refi Apps at 5-Month Lows

Interest rates increased to the highest levels since last fall and thernvolume of mortgage applications responded as might be expected, falling acrossrnthe board.  The Mortgage BankersrnAssociation (MBA) said its Market Composite Index dropped 5.5 percent on arnseasonally adjusted basis during the week ended June 12 and was down 6 percentrnunadjusted.</p

Refinancing also decreased from the weekrnbefore.  Its index fell 7 percent and thernshare of all applications that were for refinancing went down to 48.5 percentrnfrom 49 percent.  The seasonally adjustedrnPurchase Index decreased 4 percent and the unadjusted PurchasernIndex 6 percent compared with the previousrnweek.  The unadjusted PurchasernIndex was 15 percent higher than thernsame week one year ago.</p

Refinance Index vs 30 Yr Fixed</p

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Purchase Index vs 30 Yr Fixed</p

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“Rising rates continue to creaternvolatility in weekly mortgage applications activity,” Mike Fratantoni, MBA’srnChief Economist said.  “The 10-year Treasury hit 2.5 percent last week and our survey’srn30-year fixed rate of 4.22 percent is at its highest level since October 2014. The refinance index dropped tornthe lowest level since January 2015 as rates continued to increase.”</p

Applications for government-backed loans asrna whole were down.  Those for FHA loans easedrndown from a 14.3 percent share to 14.2 percent and USDA applications decreased from a 1.1 percent share during the week ended Junern5 to 0.9 percent. Only VA loan applications held constant, keeping an 11.5rnpercent share.  </p

Both the average contract rate andrneffective rate increased for all loans tracked by the survey.  Thirty-year fixed-rate mortgages (FRM) withrnconforming loan balances ($417,000 or less) saw an average contractrninterest rate of 4.22 percent, up from 4.17 percent the previous week whilernpoints jumped to 0.46 from 0.38.  </p

The jumbo 30-year FRM with loan balances greater than $417,000 saw a rate increase of 3 basisrnpoints to 4.18 percent.  Points dipped to 0.36 from 0.37. </p

The average contract interest rate forrn30-year FRM backed by the FHA increased to 4.00 percent from 3.90 percent.  Points rosernto 0.20 from 0.19. </p

The rate for 15-year FRM went from 3.37 percent to 3.43 percentrnduring the week.  Points ticked up torn0.33 from 0.32. </p

The adjustable-rate mortgage (ARM) sharernof activity increased to 6.5 percent of totalrnapplications from a 6.3 percent share the week before.  The average contract interest rate for 5/1rnARMs moved to 3.15 percent from 3.06 percent and points increased to 0.52 from 0.50. </p

MBA’s Weekly Mortgage Applications Survey,rnwhich the company has conducted since 1990, covers over 75 percent of all U.S. retailrnresidential mortgage applications. Respondents includernmortgage bankers, commercial banks and thrifts. Basernperiod and value for all indexes is March 16,rn1990=100 and interest rate information presumes mortgages with an 80rnpercent loan-to-value ratio and points that include the origination fee.

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