Mortgage activity falls as mortgage rates rise
Mortgage activity dropped sharply week-over-week as mortgage rates traveled uphill, the Mortgage Bankers Association (MBA) said in its weekly mortgage report.
According to the MBA’s Weekly Mortgage Applications Survey for the week ending October 19, 2012, mortgage loan application volume dropped 12.0 percent on a weekly basis as interest rates for both fixed-rate mortgages and adjustable-rate mortgages (ARMs) rose.
Mortgage rates rise across the board
Average rates for 30-year fixed mortgages – those with conforming loan balances of $417,500 or less – increased to 3.63 percent from 3.57 percent the previous week. This is the third straight week of increases for this loan type, the MBA noted, and the 3.63 percent average rate is the highest seen since late September.
Jumbo (loans with balances greater than $417,500) 30-year fixed-rate mortgages rose to an average rate of 3.85 percent from 3.81 percent one week earlier, and FHA-backed 30-year fixed mortgages rose to 3.41 percent from 3.34 percent.
Shorter-term 15-year fixed mortgages averaged 2.96 percent after coming in at 2.87 percent the previous week.
In addition, 5-year ARMs saw a significant increase in average rates – to 2.72 percent from 2.59 percent one week earlier.
Drop in refinancing seen
In this latest data, the MBA’s Refinance Index decreased 13 percent week-over-week and is at its lowest point since late August.
This drop in refinancing applications dropped to the refinance share (of total mortgage activity) to 81 percent. Last week, the refinance share of activity came in at 82 percent.