Mortgage demand fell for the 7th week in a row with an 8.3% drop in total demand, according to the Mortgage Bankers Association…(MBA)
- REFIS: The Refinance Index continued to fall with a 7.0% drop week-over-week, this is 71% from one year ago.
- PURCHASES: The Purchase Index saw a big drop with an 8.0% decrease week-over-week, this is 17% lower than one year ago.
NOTE: The refinance share of mortgage activity decreased to 35.0 percent of total applications from 35.7 percent the previous week.
Mortgage rates showed no signs of slowing with another double-digit jump for the week…
- 30-YR FIXED: The average contract rate was up 17 basis points to 5.37%, this is a whopping 230 basis points higher than the same time one year ago. Wow.
- 15-YR FIXED: The average contract rate was up a whopping 24 basis points to 4.68%, this is up 182 basis points from the same time one year ago.
As rates rise, adjustable-rate mortgages are starting to appeal to some buyers who are hoping rates in the future will fall. The ARM’s share of activity increased to 9.3% from 8.5% last week and was more than double the 3.5% of total applications we saw one year ago.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, noted the growth in ARM activity…
- “In a period of high home-price growth and rapidly increasing mortgage rates, borrowers continued to mitigate higher monthly payments by applying for ARM loans. The ARM share of applications last week was over 9 percent by loan count and 17 percent based on dollar volume. At 9 percent, the ARM share was double what it was three months ago, which also coincides with the 1.5 percentage point increase in the 30-year fixed rate.”