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Refinancing Volume Responds to Improvement in Rates

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Mortgage applications increased slightly last week as interest rates fell and refinancing applications recovered slightly. The Mortgage Banking Association (MBA) said its quantitative measure, the Market Composite Index, was down 20% from the previous week before adjustment, but increased by 0.7% from a week ago on a seasonally adjusted basis.

Refinancing applications increased by 2.0% weekly, It is 80 percent below the level for the same week in 2021. The percentage of refinancing applications increased from 29.7% of the total received last week to 30.3%.

The purchase index rose 0.1% on an adjusted basis compared to the previous week, The unadjusted index fell 21% from the previous week and 24% from the same week last year.

“”Mortgage rates Joel Kan, vice president of economics and industry forecasting at the MBA, said: “After rising 65 basis points in the last three weeks, the 30-year fixed rate fell 14 basis points last week to 5.84%. Interest rates are significantly higher than they were a year ago when the 30-year fixed rate was 3.2%. Is getting higher. Mortgage rates Refinancing has increased slightly due to the increase in traditional loans. However, refinancing is still 80% lower than it was a year ago and more than 60% lower than the historical average. ”

Mr. Suga added as follows. Mortgage rates, Soaring house prices, and rising economic uncertainty. Last week’s purchase application was basically flat, but was supported by a 6% increase in government lending. The average purchase loan amount has dropped to $ 413,500. This has been a continuous downtrend since reaching a record $ 460,000 in March 2022. “

There was additional data from the MBA’s weekly application survey

  • Total application FHA share remained unchanged at 12.0% from the week before, VA share increased from 10.7% to 11.2%, and USDA application increased from 0.5% to 0.6%.
  • The average size of all loans decreased with the loan purchased. It was $ 371,000 last week and was $ 382,800 last week, but it is on a downward trend as the week ending May 6 averaged $ 401,900.
  • The average interest rate on jumbo 30-year fixed rate mortgages fell from 0.45 points to 5.49% to 0.29 points to 5.42%.
  • Interest rates on FHA-backed 30-year fixed rate loans remained unchanged at 5.62%, but points fell from 1.18 to 1.15.
  • 5/1 Floating rate Mortgage (ARM) average contract rates have fallen from 4.78% to 4.64%. The point has retreated from 0.84 to 0.72.
  • ARM applications dropped from 10.6% share last week to 10.1%.

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