Demand for purchase mortgages was up a seasonally adjusted 2.7 percent last week compared to the week before, but was down 15 percent from a year ago, the Mortgage Bankers Association said in releasing the results of its latest Weekly Mortgage Applications Survey.
Applications for refinancings were down 7.1 percent from the week before, even though an increase in interest rates on fixed-rate mortgages was offset by reduced lender fees, the survey showed. Requests for refinancings accounted for 65 percent of total applications — the lowest share since October.
For the week ending March 19, the average contract interest rate for 30-year fixed-rate mortgages increased to 5.01 percent from 4.91 percent, with points decreasing to 0.76 from 1.3 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate was essentially unchanged from last week due to the decrease in points, the MBA said.
The average contract interest rate for 15-year fixed-rate mortgages increased to 4.33 percent from 4.24 percent, with points decreasing to 0.77 from 1.47 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week due to the significant decrease in points.
The average contract interest rate for one-year ARMs remained unchanged at 6.75 percent, with points increasing to 0.32 from 0.3 (including the origination fee) for 80 percent LTV loans.
Mortgage rates are expected to rise gradually after the Federal Reserve discontinues a program in which it’s purchased $1.25 trillion in mortgage-backed securities (see story).
In a March 15 forecast, MBA economists said they expect rates on 30-year fixed-rate mortgages to climb to 5.8 percent during the final quarter of the year, and to average 6.2 percent in 2011 and 6.4 percent in 2012.
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