Mortgage apps down as 30-year rate hits 5-year high

There was a slight decrease in new mortgage applications last week as refinance activity continued to weaken amid rising rates

By Steve Randall

26 Apr 2018

There was a slight decrease in new mortgage applications last week as refinance activity continued to weaken amid rising rates.

The Mortgage Brokers Association’s Market Composite Index was down 0.2% (seasonally adjusted) for the week ending April 20 following a 4.9% week-over-week rise in the previous 7 days. Unadjusted there was a 1% increase in the index.

The refinance index was down 0.3% while the purchase index was unchanged on a seasonally adjusted basis but up 1% unadjusted and 11% above its rate of a year ago.

The refinance share of mortgage activity decreased to 37.2% of total applications, the lowest level since September 2008, from 37.6% the previous week.

The adjustable-rate mortgage (ARM) share of activity decreased to 6.5% of total applications.

FHAs took a 10.2% share of total applications down from 10.6% the week prior; VAs had a 10.1% share of total applications down from 10.4% the week prior. The USDA share of total applications remained unchanged at 0.8%.

Mortgage rates still climbing

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.73% (from 4.66% a week earlier) - its highest level since September 2013 - with points increasing to 0.49 from 0.46 (including the origination fee) for 80% LTV loans. The effective rate was also higher.

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 January 2014, at 4.64% up from 4.53%, with points increasing to 0.39 from 0.38 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.71% from 4.70%, with points increasing to 0.79 from 0.53 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since April 2011, 4.13% from 4.08%, with points increasing to 0.52 from 0.47 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to its highest level since February 2011, 3.98% from 3.94%, with points increasing to 0.44 from 0.43 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.