Higher interest rates dissuaded borrowers last week as overall mortgage application activity dropped again, the Mortgage Bankers Association reported today.
The market composite index, a measure of home loan application volume, sank 1.7 percent last week on a seasonally adjusted basis from the week before, taken lower by another sizeable decrease in refinancings.
The index that tracks refinancings fell 6.3 percent last week following a 13 percent drop two weeks ago, while the home-purchase index gained 1.5 percent. The refi share of applications is now down to 38 percent, while the adjustable-rate mortgage (ARM) share edged up to 17.8 percent from 17.7 percent the previous week, according to MBA.
Interest rates moved higher for the third straight week, with the average rate for 30-year fixed-rate mortgages rising to 6.35 percent from 6.32 percent, the 15-year fixed rate up to 6.13 percent from 6.05 percent, and the one-year ARM holding at 5.74 percent.
Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.5 on the 30-year loans, 1.2 on the 15-year, and 1.14 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.