Mortgage Applications Increase, Rates Went Up

Mortgage rates climbed for the first time in the new 2017 as the Dow Jones index set a milestone by reaching 20,000. Interest rates on mortgages have been in decline three weeks in a row.

The 30-year fixed-rate mortgage rose this week to 4.32% from 4.18%, according to Bankrate.com survey of large lenders. In January 2016, the rate was 3.94%. The 30-year fixed rate has averaged 3.81% percent over the past 52 weeks. This week’s rate is 0.41%.

The benchmark 15-year fixed-rate mortgage rose to 3.51% from 3.41%. The benchmark 5/1 adjustable-rate mortgage rose to 3.51% from 3.45%. The benchmark 30-year fixed-rate jumbo mortgage rose to 4.31 % from 4.24%.

More People Are Buying Homes?

Mortgage applications increased 4.0% from one week earlier, according to the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending January 20, 2017.

The index that measures the mortgage loan application volume, increased 4.0% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5% compared with the previous week. The seasonally adjusted Purchase Index increased 6% from one week earlier to its highest level since June 2016.

The refinance share of mortgage activity decreased to 50% of total applications, the lowest level since July 2015. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.7% of total applications. The average loan size for purchase applications increased to $309,200, its highest level since mid-December, 2016.

The government-backed home loans (FHA) share of total applications increased to 13.6% from 13.1% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,000 or less) increased to 4.35% from 4.27%, with points decreasing to 0.30 from 0.39 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,000) increased to 4.28% from 4.22%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration (FHA) increased to 4.19% from 4.10%, with points increasing to 0.35 from 0.28 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.57% from 3.51%, with points decreasing to 0.28 from 0.34 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 5/1 ARMs decreased to 3.41% from 3.44%, with points increasing to 0.30 from 0.21 (including the origination fee) for 80% LTV loans.