Purchase application volume increased 1% on a seasonally adjusted compared with the previous week. On an unadjusted basis, it is 5% higher for the same week in 2012.
Going forward, market observers cite factors that could make it a bumpy ride for new business coming in, with rates on the 30-year fixed-rate loan increasing by double digits on a national average basis for the past week.
"The economic data continues to be firm enough to fuel expectations that the Fed will begin tapering its purchases of mortgage-backed securities and Treasury bonds in September," said Keith Gumbinger, vice president of HSH.com. "The economy may not be all that strong, but there are few indications of significant weakening that could push the date further into the future.
"There could still be employment, housing or other economic reports which might give the Fed pause. However, it is likely that they would need to be truly weak numbers to stop the Fed from beginning the process of returning to a more normal monetary policy.”
HSH.com’s weekly mortgage radar found the average rate for the 30-year fixed-rate mortgage increased 12 basis points during the week ended Tuesday, to 4.61%.
Zillow Mortgage Marketplace’s rate tracker finds the 30-year fixed mortgage rate rising over the past week by 21 basis points to 4.52% as of Tuesday afternoon.
Erin Lantz, director of Zillow Mortgage Marketplace, said, “We expect rates to continue to rise gradually this week, unless Wednesday’s Federal Reserve minutes contradict expectations that the Fed will begin to wind down its stimulus program in September.”
According to the MBA application survey, the average contract rate for the 30-year conforming FRM (MBA defines this as a loan with a balance of $417,500 or under) for the survey period is 4.68%, up 12 basis points from the previous week. Federal Housing Administration-insured loans had an average contract rate for the week of 4.4%, up 15 basis points from the previous week.
Jumbo 30-year FRMs saw the average contract rate rise by 17 basis points to 4.74%. The MBA said the rate for the 15-year FRM increased by 11 basis points to 3.71%.
The share of adjustable-rate mortgages was 6% of the week’s loan applications and the average contract rate for the 5/1 ARM rose eight basis points to 3.44%.