In the fourth week of August 2013 mortgage applications have decreased significantly. The Mortgage Bankers Association reported that applications were down 2.5% compared to a week prior.
Refi’s also decreased by 5% in the same period.
The average 30 year fixed rate mortgage, FRM, is currently 4.8% which is the highest rate yet since April 2011. 30 year jumbo rates also climbed slightly from 4.74% to 4.78%.
If you keep an eye on GSE loans, FHA 30 year fixed rate mortgages are now at 4.52% from 4.40% within that same week.
15 year FRM’s nudged their way closer to 4% as well, sitting at 3.84% as did the adjustable rate mortgage, ARM, now at 3.5%.
All in all, reports are showing that the rising interest rates are deterring new mortgage applications, at least in August. Coincidentally, purchases had an increase of 2% during that week.
However, one could attribute the decrease in mortgage applications to people returning from last minute summer vacations, and getting the kids ready for the new school year. It is possible that mortgage and refi activity will pick back up as things get back to normal.