Dropping to its lowest level in a year and a half, refinance demands fell for a fourth continuous week, while, the mortgage rates continued to climb.
It was the weakest demand for refinancing since November 2011. According to the weekly Mortgage Bankers Association (MBA) survey, as the average interest rates on 30-year fixed-rate mortgages dropped 4 percent for the first time in over a year, applications to refinance an existing mortgage hit an all-time low, dropping 11.5 percent as of last week.
Demand for home purchase mortgage applications was only down 2 percent for the week, allowing it to remain 14 percent above last year’s level. Refinancing fell to 68 percent of all mortgage applications and the Home Affordable Refinance Program for low- and negative equity mortgages accounted for under one third of all the refinance applications.
The average interest rate for conventional 30-year fixed-rate mortgages rose to 4.07 percent, (the highest since April 2012), from 3.90 percent just as of last week, for loans with at least an 80 percent loan-to-loan ratio. Both, the average on adjustable-rate mortgages and the average rate on 15-year fixed-rate mortgages spiked to the highest rates in over a year. The average rate on 15-year fixed-rate mortgages, usually used for refinancing, rose to 3.23 percent, while the average on 5/1 adjustable-rate mortgage rose to 2.76 percent.