According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from the week before. Rates were up across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. Joel Kan, MBA’s vice president and deputy chief economist, says last week’s increases drove interest in adjustable rate mortgages higher. “The ARM share of applications increased to 7.6 percent, the highest level in five months, and the number of ARM applications picked up by 4 percent last week,” Kan said. “Some home buyers are looking to lower their monthly payments by accepting some interest rate risk after the initial fixed period.” Overall, higher mortgage rates led to a 4.2 percent decline in demand for mortgage applications last week, including a 5 percent drop in demand for loans to buy homes. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
