Mortgage rates rise, driving down refi applications(Read article summary)
Mortgage rates for a 30-year fixed and 15-year fixed both increased this week to 4.56 percent. Refinancing applications dropped over 20 percent.
SoldAtTheTop / The Paper Economy
The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.
The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.
The latest data is showing that the average rate for a 30 year fixed rate mortgage increased since the last week to climbing 6 basis points to 4.56% while the purchase application volume increased 1.1% and the refinance application volume declined a whopping 21.6% over the same period.
It's important to note that with the final expiration of the governments massive housing tax credit subsidy, home purchase activity has been trending down precipitously despite continued declining interest rates.
The purchase application volume remains near the lowest level seen in well over a decade.
The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages as well as one year ARMs since 2006 (click for larger dynamic full-screen version).
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