The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 5.8% in the group’s seasonally adjusted composite index for the week ending January 6. Mortgage loan rates declined on four of five types of loans during the week.
On an unadjusted basis, the composite index increased by 42% week over week. The seasonally adjusted purchase index increased by 6% compared with the week ended December 30. The unadjusted purchase index increased by 45% for the week and is now 18% lower year over year.
The MBA’s refinance index increased by 4% week over week, and the percentage of all new applications that were seeking refinancing slipped from 52.2% to 51.2%.
Adjustable rate mortgage loans accounted for 5.5% of all applications, up from 5.4%.
Mortgage rates have continued to dip as bond markets make their first tentative buys after strong selling in December. When bond traders sell, mortgage rates rise; when they buy, rates fall. The rate changes have been modest so far, but they are encouraging for prospective borrowers.
One more encouraging note on the housing market: the U.S. foreclosure inventory dropped to 26,000 properties in the month of November, within sight of the pre-crisis average level of 21,000.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.39% to 4.32%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.37% to 4.27%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.64% to 3.56%.
The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.28% to 3.32%. Rates on a 30-year FHA-backed fixed-rate loan fell from 4.22% to 4.08%.
By Paul Ausick
Mortgage Loan Rates Continue Downward Trend - 24/7 Wall St.
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