MBA: Higher Rates Continue To Impact Mortgage Application Volume

Mortgage application volume continues to decline as interest rates rise, the Mortgage Bankers Association's Weekly Mortgage Applications Survey reveals.

Application volume dipped 2.5% for the week ending August 23, on an adjusted basis, compared to the week prior. On an unadjusted basis, volume was down 3%.

As to be expected when mortgage interest rates rise, refinancing volume decreased dramatically. Refinancing volume was down 5%, compared to the week prior. In fact, refinancing volume is down 64.2%, compared to the week ending May 3.

Still, refinancings accounted for about 60% of all applications – down from 61% the previous week.

The seasonally adjusted Purchase Index increased 2% from one week earlier. The unadjusted Purchase Index increased 0.3%, compared with the previous week, and was 6% higher than the same week one year ago.

The adjustable-rate mortgage (ARM) share of activity increased to 7% of total applications. The HARP share of refinance applications increased to 35% from 34% the week prior.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.8%, the highest since April 2011, up from 4.68%. The average interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.78%, up from 4.74%.

The average interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.52%, the highest rate since July 2011, up from 4.4%.

The average interest rate for 15-year fixed-rate mortgages increased to 3.84%, the highest rate since April 2011, up from 3.71%.

The average contract interest rate for 5/1 ARMs increased to 3.5%, the highest rate since April 2011, up from 3.44%.

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