Applications for U.S. home mortgages decreased last week as purchasing and refinancing activity dropped due to an increase in mortgage rates, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity decreased 9.5 percent to 658.8 in the week ended March 18, more than offsetting the 3.2 percent rise the week before.
Interest rates on fixed 30-year loans edged up last week, and have been steadily climbing in recent weeks.
Fixed 30-year mortgage rates averaged 5.95 percent last week, excluding fees, up 4 basis points from 5.91 percent the previous week, but 24 basis points higher than a month ago.
“The increase in mortgage rates has reduced application activity across the board, particularly for refinances. Refinance applications are down more than 60 percent relative to this time last year,” Michael Fratantoni, MBA’s senior director of single family research and economics, said in a press release.
The MBA’s seasonally adjusted index of refinancing applications dropped 16.5 percent to 1894.4, after rising 4.2 percent the prior week.
Refinancings also decreased as a percentage of all mortgage applications, falling to 39.5 percent from 42.9 percent the previous week.
The MBA’s purchase index, a gauge of loan requests for home purchases, declined for the first time in four weeks, falling 3.5 percent 446.4, after it gained 2.5 percent the previous week
Applications for adjustable-rate mortgages (ARMs) increased to 33.5 percent from 32.4 percent of total applications.
One-year ARM rates averaged 4.12 percent, down from 4.19 percent one week earlier.
The MBA’s survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.