According to the Mortgage Bankers Association’s Weekly Application Survey, average mortgage rates spiked last week from one week earlier. Rates were up across all loan categories including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. Mike Fratantoni, MBA’s senior vice president and chief economist, says the increase slowed mortgage demand. “Mortgage rates moved 20 basis points higher last week, abruptly slowing the pace of mortgage application activity with refinance volume dropping 12 percent and purchase volume falling 5 percent for the week,” Fratantoni said. “Purchase volume remains almost 13 percent above last year’s level, but economic uncertainty and the volatility in rates is likely to make at least some prospective buyers more hesitant to move forward with a purchase.” Overall, the Market Composite Index – which measures both refinance and purchase activity – was down 8.5 percent week-over-week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
