Overall mortgage application volume declined by double digits last week from one week earlier amid gradually rising interest rates, the Mortgage Bankers Association reported today.

The market composite index, which measures total home loan volume, fell to 555.8 last week, down 14.2 percent on a seasonally adjusted basis from 647.6 the week before.

Refinancings took the largest hit, as the seasonally adjusted refinance index decreased by 18.5 percent to 1,604.6 from 1,968.8 the previous week. The purchase index decreased by 10.6 percent to 390.2 from 436.5 one week earlier.

The refinance share of mortgage activity decreased to 48.8 percent of total applications from 50.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 23.1 from 23.6 percent of total applications during the period, and is now at its lowest level since October 2003.

The average contract interest rate for 30-year fixed-rate mortgages increased to 6.12 from 6.1 percent, with points including the origination fee increasing to 0.96 from 0.93 for 80 percent loan-to-value-ratio loans.

Points, which are fees charged by lenders for loan processing, are expressed as a percent of the total loan amount.

The average contract interest rate for 15-year fixed-rate mortgages increased to 5.84 percent from 5.82 percent. Points including the origination fee rose to 1.06 from 0.99 for 80 percent loan-to-value-ratio loans.

The average contract interest rate for one-year ARMs increased to 5.87 percent from 5.82, with points including the origination fee decreasing to 0.80 from 0.83 for 80 percent loan-to-value-ratio loans.

Washington, D.C.-based Mortgage Bankers Association is a national association representing the real estate finance industry. The survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

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