Given the spike in interest rates over the past couple of months, even a small increase in application volume of 0.2% on a seasonally adjusted basis for the week ended Aug. 2, according to the Mortgage Bankers Association’s Market Composite Index survey, could be considered as good news.
The Refinance Index was unchanged from
Purchase application volume is up 1% seasonally adjusted compared with the previous week. On an unadjusted basis, they are 8% higher for the same week in 2012.
HSH.com’s weekly mortgage radar found rates for the 30-year fixed-rate mortgage increased three basis points during the week ended Tuesday, to 4.53%.
Keith Gumbinger, vice president of HSH.com, commented that while the Federal Reserve wants to start pulling back on its bond buying program, it feels economic growth remains modest and thus it's not yet clear that a reduction in support for the economy is warranted.
"Data scheduled for release over the next several weeks will be key," added Gumbinger. "With mortgage and other interest rates holding near their highest levels of the year, we'll start to see if housing activity has slowed, or by how much, and discover if the Fed makes a change. At the moment, despite a soft economy, it looks as though it will, but time will tell."
Zillow Mortgage Marketplace’s rate tracker shows the 30-year fixed mortgage rate rose by four basis points to 4.28% as of Tuesday afternoon. At one point last Thursday, Zillow’s data showed the 30-year rate hit 4.42%, because of a stronger-than-expected gross domestic product report.
“However, Friday’s relatively soft jobs report erased the prior day’s gains, leaving rates essentially unchanged for the week,” said Erin Lantz, director of Zillow Mortgage Marketplace. “There are few economic reports scheduled this week, so we expect rates to remain fairly stable unless any of the Federal Reserve officials scheduled to share public remarks suggest an acceleration or delay of the Federal Reserve’s stimulus program wind down.”
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 4.61%, up three basis points from the previous week. Federal Housing Administration-insured loans had an average contract rate for the week of 4.33%, also three basis points higher from the previous week.
Jumbo 30-year FRMs saw the average contract rate remained unchanged at 4.64%. The MBA said the rate for the 15-year FRM decreased by one basis point to 3.66%.
The share of adjustable-rate mortgages was 6% of the week’s loan applications and the average contract rate for the 5/1 ARM was unchanged at 3.39%.
