Overall mortgage application volume fell last week for the third week as interest rates rose sharply, the Mortgage Bankers Association reported today.
The market composite index, a measure of mortgage application volume, dropped 3.2 percent, falling to 649.5 last week on a seasonally adjusted basis from 671 one week earlier.
The index that tracks refinancings took the biggest hit as it dropped 4.5 percent last week from the week before, and the purchase index sank 2 percent.
Refinancings and adjustable loans continued to lose market share, with refis slipping to 44.5 percent of total applications and adjustable-rate mortgages (ARMs) down to 19.2 percent.
Borrowing costs across all loan types increased again, as the average contract interest rate on the 30-year fixed-rate mortgage jumped to 6.13 percent, the 15-year fixed rate hit 5.85 percent, and the one-year ARM gained to 5.87 percent.
Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.25 on the 30-year loans, 1.09 on the 15-year, and 0.72 on one-year ARMs. Statistics, which include the origination fee, are based on loan-to-value ratios of 80 percent.
The Mortgage Bankers Association 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.