The spike in interest rates last week affected both purchase and refinance application volume, as the total number of loan applications submitted the week ended July 5 declined by 4% on a seasonally adjusted basis from
The Refinance Index decreased 4% from the previous week and the seasonally adjusted Purchase Index decreased 3% from one week earlier. On an unadjusted basis, purchase apps were 5% higher for the same week in 2012.
The share of refi apps remained in the area of 64%. The portion of refi apps for the Home Affordable Refinance Program increased to 35% from 34%.
HSH.com’s weekly mortgage radar found rates for the 30-year fixed-rate mortgage increased 16 basis points during the week ended Tuesday, to 4.61%.
"Strengthening employment data put the bond and mortgage markets on the defensive again," said Keith Gumbinger, vice president of HSH.com. "The employment report for June, released last Friday, was firmer than expected, and upward revisions to April and May figures showed that hiring is on stronger footing than was previously believed." He added that until the Federal Reserve actually starts to taper back QE3, mortgage rates will remain volatile.
Zillow Mortgage Marketplace’s rate tracker shows the 30-year fixed mortgage rate increased 24 basis points to 4.41% as of Tuesday afternoon. The 30-year FRM hovered between 4.2% and 4.3% early last week, spiked to 4.6% on Friday and through the weekend, before declining near the current rate early this week.
Zillow added that the last time it had rates exceeding 4.4% was on July 26, 2011.
Erin Lantz, director of Zillow Mortgage Marketplace, said, “This week, rate movement will depend on whether Wednesday’s release of the Federal Open Market Committee meeting minutes and Fed Chairman Ben Bernanke’s speech reinforce or depress market expectations of a September start of easing federal stimulus.”
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%, an increase of 10 basis points and the highest it has been since July 2011. Federal Housing Administration-insured loans had an average contract rate for the week of 4.37%, up 10 basis points from the previous week.
Jumbo 30-year FRMs saw the average contract rate rise 18 basis points to 4.86%. MBA said the rate for the 15-year FRM increased by 12 basis points to 3.76%.
The share of adjustable rate mortgages was 7% of the week’s loan applications and the average contract rate for the 5/1 ARM was up seven basis points to 3.4%.
