MBA: Mortgage application filings drop as rates rise
The volume of mortgage applications filed in the past week fell sharply as mortgage rates continued to climb and refinancing activity remained low, the Mortgage Bankers Association said in its Weekly Mortgage Applications Survey. The survey of mortgage loan volumes for the week ending Feb. 4 shows the market composite index — a measure of loan volume — dropping 5.5% on a seasonally adjusted basis when compared to a week earlier. On an unadjusted basis, the index fell 3.9%. The refinance index, which measures the number of homeowners filing to refinance mortgages, also declined 7.7% when compared to the previous week, while the purchase index fell 1.4% on a seasonally adjusted basis. "Mortgage rates increased last week as many incoming economic indicators continue to show stronger growth than had been anticipated," said Michael Fratantoni, MBA’s vice president of research and economics. "Refinance volume continues to be low, as fewer homeowners with equity have any incentive to refinance. We are at the beginning of the spring buying season, but purchase volume remains weak on a seasonally adjusted basis." The four-week moving average for the seasonally adjusted market index is down 0.9%, while the four-week moving averages for the purchase index and the refinance index are down 0.8% and 1.5%, respectively. Refinancing activity decreased to 66.6% of total applications last week, compared to 69.3% a week earlier. The average interest rate for a 30-year, fixed-rate mortgage increased to 5.13%, up from 4.81%, the MBA said. In addition, the average rate for a 15-year, fixed-rate mortgage increased to 4.29%, up from 4.13%, making it the highest 15-year rate observed since May of last year. Write to Kerri Panchuk.