U.S. mortgage applications dip as rates rise

WASHINGTON – The number of mortgage applications filed nationwide fell last week as interest rates continued to rise, the Mortgage Bankers Association said today in its weekly report.
The trade group’s seasonally adjusted Market Composite Index – a measure of overall mortgage loan application volume – fell to 489.6 points in the week ended July 18. That was 6.2 percent below the preceding week’s 522.2-point score and 19.6 percent below the index in the same week a year earlier.
But the index remained above the 461.3-point level, in the week ended June 20, that was the lowest since February 2003. (READ MORE)
The MBA’s seasonally adjusted Purchase Index fell 6.7 percent last week to 335.6 points, from 350.5 points in the week ended July 11. The Refinance Index fell 5.6 percent to to 1,392.7 points last week, from 1,474.9 point the week before.
Refinancing attempts accounted for 39.4 percent of all mortgage applications last week, up from their 39.2-percent share the week before, the MBA said. Adjustable-rate mortgages (ARMs) fell to 8.5 percent of total applications – their lowest level since the week ended June 27 – from 9.1 percent of applications in the week ended July 11.
Meanwhile, the average contract interest rate for a 30-year fixed-rate mortgage edged up to 6.59 percent last week from 6.22 percent the week before, and the average rate on a 15-year fixed mortgage rose to 6.10 percent from the preceding week’s 5.74 percent. The rate on a one-year ARM remained at 7.16 percent for the second week in a row, after hitting 7.24 percent in the week ended July 4.
Mortgage interest rates “are higher now than when the Fed started to ease policy,” Girard Minack, a Sydney-based market strategist with Morgan Stanley, wrote in a note to investors today, according to Bloomberg News. “Problems amongst lenders and the global credit system have blocked the pass-through of lower official rates.”
The MBA survey, compiled each week since 1990, covers about half of all retail residential mortgage originations nationwide.
The Mortgage Bankers Association is a trade group representing the real estate finance industry. Its 3,000 member companies include mortgage firms, commercial banks, thrifts, life insurance companies and others. Additional information, including the MBA’s Weekly Application Survey, is available at www.mortgagebankers.org.