According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up slightly last week from the week before. In fact, rates rose across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. Though the increases were minor, it was enough to cause a 6 percent drop in refinance activity. Michael Fratantoni, MBA’s chief economist, told CNBC there are fewer borrowers looking to refinance with rates at their current level. “Refinance activity decreased for the second-straight week because fewer borrowers have an incentive to refi at the current level of rates, but there are still some who respond to the small changes we have seen in recent weeks,” Fratantoni said. Since demand for loans to buy homes is less affected by weekly rate fluctuations, the Purchase Index was unchanged from the week before and remains 13 percent higher than the same week one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.
Purchase Activity Flat As Rates Rise
