Mortgage apps drop as rates rise

by Ryan Smith28 Apr 2016
Mortgage applications dropped 4.1% last week from the week before as interest rates rose, according to new data from the Mortgage Bankers Association.

The MBA’s Market Composite Index, which measures loan application volume, dropped 4.1% on a seasonally adjusted basis from the prior week. On an unadjusted basis, the index was down 3%. The Refinance Index dropped 5%, while the seasonally adjusted Purchase Index dropped 2%. On an unadjusted basis, the Purchase Index dropped 1% from the previous week, but was still 14% higher than the same week a year ago.

The refinance share of mortgage activity dropped to 54.4% of total applications, a full percentage point down from the week prior. The adjustable-rate mortgage share rose to 5.2% of total applications, the MBA reported.

The average interest rate for  30-year fixed-rate mortgages with conforming loan balances rose from 3.83% to 3.85%. The average rate for 30-year FRMs with jumbo loan balances rose to 3.78% from the prior week’s average of 3.77%. Average rates for FHA-backed 30-year FRMs rose to 3.66% from the previous week’s 3.64%.

Average rates for 5/1 ARMs were also up, spiking to 3.02% from the previous week’s 2.91%.
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