Higher interest rates and a short week combined to drive mortgage application volume down nearly 13% on a seasonally adjusted basis for the week ended Nov. 29
Bond investors once again priced an expected taper by the Federal Reserve into their activities, driving interest rates up during the period. “The direction of rates during this holiday-impacted week had a larger effect on mortgage activity than we saw last year and continued a recent trend of weaker applications for both purchase and refinance loans,” says Quicken Loans vice president Bill Banfield.
The Refinance Index dropped 18% compared with the previous week and is now at its lowest level since the first week of September. Refis are now 63% of new applications, down from 66% one week prior.
The seasonally adjusted Purchase Index decreased 4% from one week earlier and on an unadjusted basis is 37% lower than the same week one year ago.
Rates could move up this week if economic data to be released shows positive movement, say a number of people who follow the markets, including economists at HSH.com and Zillow.
The MBA has the 30-year conforming FRM up three basis points for the period to 4.51% while rates on the 30-year FRM jumbo were up one basis point to 4.49%. For Federal Housing Administration-insured loans, the rates were up one basis point to 4.17%.
On the 15-year FRM, rates are up four basis points to 3.56%.
The rate for the 5/1 adjustable-rate mortgage is down nine basis points to 3.09%. ARMs remain at an 8% share of new loan applications.
