An abrupt rise in interest rates helped cut mortgage application volume by 1.9 percent last week, the Mortgage Bankers Association reported today.
According to MBA, the seasonally adjusted decline was led by a 4.7 percent decrease in the index that tracks refinancings, despite a 1.4 percent gain in the purchase-loan index. As a result, the refinance share of applications fell to 50.6 percent from 52.4 percent two weeks ago, and the adjustable-rate mortgage (ARM) share dipped to 15.5 percent from 17.3 percent.
Borrowing costs in the latest survey climbed significantly, MBA reported, with interest rates rising between 39 and 89 basis points since the final week of February. The average interest rate on 30-year fixed-rate mortgages jumped from 5.98 percent to 6.37 percent; the 15-year fixed-rate average rose from 5.26 percent to 5.72 percent; and the average rate on one-year ARMs soared from 5.83 percent to 6.72 percent.
Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.05 on the 30-year loans, 1.06 on the 15-year, and 1.27 on one-year ARMs. These points include the origination fee and are based on loan-to-value ratios of 80 percent.
In last week’s survey, MBA reported that borrowers were paying average points on the 30-, 15- and one-year loans of 1.15, 1.08 and 0.85, respectively.
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.
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