Rate jump has little effect on mortgages
Posted on Wednesday, November 11, 2015 at 12:19:17 PM
Despite expectations, a spike in mortgage interest rates did little to affect mortgage application volume in early November. Mortgage applications decreased only 1.3 percent on a seasonally adjusted basis from last week, according to a press release describing the Mortgage Bankers Association's Market Composite Index.
The share of refinance mortgage activity increased very slightly, to 59.8 percent from 59.7 percent the previous week, and the share of applications for FHA loans picked up nearly an entire point, to 14.1 percent. The average contract interest rate for 30-year fixed-rate mortgages with balances of $417,000 or less, known as conforming loan balances, climbed from 4.01 percent to 4.12 percent, the highest level seen since August of this year.
A slight drop in mortgage application volume was not enough to impede interest in seeking residential financing. According to the annual survey conducted by the National Association of Realtors, 30 percent of new homebuyers said that their major reason for buying a home was simply the desire to have a house of their own. First-time buyers, many of them using the first time homebuyer credit, made up 32 percent of all those purchasing new homes.