Applications to refinance a home loan fell 4 percent, seasonally adjusted, and average refinance loan sizes declined. Given how low mortgage rates have been for so long, today’s refinancers are highly rate-sensitive; even the slightest move higher in rates keeps more borrowers from being able to benefit from a refinance. Refinance applications are 12 percent lower than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since October 2014, 4.28 percent, from 4.27 percent, with points decreasing to 0.36 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio loans. The average rate for larger, jumbo loans, rose even higher.
“While jumbo 30-year fixed rates have been a bit slower to increase compared to overall fixed rate mortgage rates in recent weeks, they increased 7 basis points last week to an average of 4.29 percent. At the same time, the average five-year ARM rate declined by 11 basis points to 3.28 percent, which may provide an alternative outlet for jumbo borrowers,” said Lynn Fisher, MBA vice president of research and economics.