Jump in rates doesn’t deter homebuyers, as mortgage applications increase 4%
Refinance volume did move slightly higher again last week, up 0.2 percent seasonally adjusted. It had jumped sharply the previous week, after outgoing HUD Secretary Julian Castro announced a quarter-point drop in the FHA’s annual mortgage insurance premium. By last week, there was already considerable speculation that incoming HUD Secretary Ben Carson would reverse the move, and, in fact, that was one of the first acts of the Trump administration immediately following the inauguration on Friday.
The FHA share of total applications increased to 13.6 percent from 13.1 percent the previous week, but that is likely to fall back next week. Mortgage rates also moved higher, but that didn’t cut into refinance demand.
“While this was the first rate increase in January, rates remain about 10 basis points lower than four weeks ago,” said Lynn Fisher, MBA vice president of research and economics.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,000 or less) increased to 4.35 percent from 4.27 percent, with points decreasing to 0.30 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio loans.