Mortgage rates jumped sharply on a weekly basis as mortgage activity slowed, the Mortgage Bankers Association (MBA) said in its weekly mortgage report.
According to the MBA, average interest rates increased for nearly all mortgage types in this latest weekly data.
Average rates for 30-year fixed mortgages – those with conforming loan balances $417,500 or less – rose to 3.90 percent from 3.78 percent the previous week. This is the highest average rate for conforming 30-year fixed mortgages in a year – since May 2012,
Shorter-term 15-year fixed mortgages rose to the highest average rate since August 2012, increasing week-over-week from 2.96 percent to 3.10 percent.
Other types of fixed mortgages also saw rate increases week over week. FHA-backed 30-year fixed mortgages saw rates rise from 3.53 percent to 3.62 percent on a weekly basis and jumbo 30-year fixed mortgages – those with loan balances greater than $417,500 – rose from 3.93 percent to 4.07 percent in the same time frame.
Meanwhile average rates for 5-year ARMs stayed even week-over-week at 2.60 percent.
Mortgage activity overall decreased 8.8 percent from the week before, the MBA said. Activity is measured by mortgage application volume.
Mortgage refinancing activity in particular saw a big drop, falling 12 percent week over week.
“Refinance applications fell for the third straight week bringing the refinance index to its lowest level since December 2012 as mortgage rates increased to their highest level in a year,” Mike Fratantoni, MBA’s Vice President of Research and Economics, said in a statement.
The percentage of overall mortgage activity associated with refinancing fell to 71 percent of total applications, down from 74 percent the previous week.
“Rates rose in response to stronger economic data and an increasing chance that the Fed may soon begin to taper their asset purchases,” Fratantoni said.