Mortgage loan application volume dropped sharply for the period ending Feb. 13 as mortgage rates rose to their highest level since the beginning of the year.
The Mortgage Bankers Association’s market composite index decreased 13.2% on a seasonally adjusted basis from one week earlier when the index also fell by 9%. Both the refinance and purchase gauges declined week over week, by 16% and 7%, respectively.
“Refinance volume fell particularly for larger loans, as evidenced by the decline of almost $25,000 in the average loan size for a refinance loan,” said Mike Fratantoni, the chief economist at the Mortgage Bankers Association.
All types of mortgage interest rates were higher than a week earlier. For example, the average contract interest rate for 30-year fixed conforming mortgages below $417,000 elevated nine basis points, to 3.93%. Meanwhile, jumbo loan balances had the average 30-year rate rise two basis points, to 3.92%.
Furthermore, the average 30-year interest rate for mortgages backed by the Federal Housing Administration was up one basis point, to 3.73%. Additionally, the average contract interest rate for 15-year fixed mortgage increased nine basis points, to 3.24%.
The Washington-based trade group’s survey covers over 75% of all U.S. retail residential mortgage applications.