It would appear that rising interest rates are starting to affect new mortgage applications.
The Mortgage Bankers Association reported Tuesday morning that applications fell 7.4% for the week ending March 16 with the refinance share falling to 73.4%, the lowest reading since last July.
"With the rate increase last week, refinances are obviously slowing,” said MBA chief economist Jay Brinkmann. “With rate/term refinances falling as we go forward, HARP will be a bigger percentage of refinances but will be more concentrated in certain states.”
HARP is a government refi program where underwater GSE borrowers have an opportunity to obtain a new loan. Fannie Mae and Freddie Mac are now accepting HARP refis through their automated underwriting systems. (See
Brinkmann noted that some of the nation's largest lenders saw flat HARP refis last week, but he anticipates big increases are coming in the “sand” states where delinquencies are the highest.
“We saw big state-level differences in refinance applications for February over January: Florida was up 49%, Arizona was up 61%, and Nevada was up 71%,” he said. “Refinances in the rest of the country were generally flat or even down.”
MBA tracks applications through a proprietary index. Its weekly comparison numbers are sequential.
For the week ending March 16, 30-year FRMs were being offered at 4.19% on average, compared to 4.06% the week prior. Points increased to 47 basis points from 43.
