A reduction in refinancings led to an overall fall in mortgage applications as interest rates rose across the board, according to data released Wednesday by the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey's market composite reported that the volume of mortgage loan applications plunged 3.5% on a seasonally adjusted basis
As a share of overall mortgage activity, refinance dropped to 51% from 52% a week earlier, its lowest level since May 2014. The FHA share also fell to 13.8% from 14% last week, while the VA share remained stable at 11.9%.
Additionally, the adjustable-rate mortgage and USDA shares rose to 6.3% and 0.9%, respectively. The survey also noted an uptick in loan sizes with the average size for purchase applications increasing to $298,500, a survey high.
A sweeping rise in mortgage rates to the highest levels seen since March fueled the drop in application volume.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4% from 3.93%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances jumped 8 basis points to 3.99%.
Another big increase was seen for 30-year fixed-rate mortgages backed by the FHA, which had an average contract rate jump to 3.76% from 3.7% a week earlier. The average contract interest rates for 15-year fixed-rate mortgages and 5/1 ARMs rose more modestly by 4 and 3 basis points, respectively, to 3.23% for the former and 3% for the latter.
