Mortgage applications rise for second week despite historically high rates: Massachusetts Homebuyers Homeownership

 Mortgage applications rose for the second week in a row during the week ended May 6, as some homebuyers managed to shrug off rising mortgage rates that have reached their highest level since 2009. Mortgage applications rose two percent on a seasonally adjusted basis, thanks to strong gains in conventional and government purchase loans, the Mortgage Bankers Association said, citing its Market Composite Index.

 The average contract interest rate for conforming thirty year mortgages of six hundred forty seven thousand and two hundred dollars or less rose to 5.53 percent from 5.36 percent, while the rate for thirty year fixed rate mortgages backed by the Federal Housing Administration increased to 5.37 percent from 5.27 percent. “Despite a slow start to this year’s spring homebuying season, prospective buyers are showing some resiliency to higher rates,” MBA associate vice president of economic and industry forecasting Joel Kan said in a press release.

 Kan noted that the share of adjustable-rate mortgages rose to eleven percent of overall loans and to nineteen percent by dollar volume, as borrowers sought to combat higher rates. “The rapid rise in mortgage rates continues to hit the refinance market, with activity seventy percent below a year ago,” Kan added. “Most homeowners refinanced to lower rates in the past two years.” The refinance index slid two percent from the previous week and was down seventy two percent from the same week a year ago. The refinance share of mortgage activity decreased to 32.4 percent of total applications from 33.9 percent the previous week.

 The FHA share of total applications slid to 10.5 percent from 11.1 percent, while the VA share of total applications rose to 10.5 percent from 10.3 percent. The USDA share of total applications rose to 0.5 percent from 0.4 percent. The seasonally adjusted purchase index rose five percent from the previous week, while the unadjusted purchase index gained five percent and was eight percent lower than one year ago. The average contract interest rate for thirty year fixed rate mortgages with jumbo loan balances of more than six hundred forty seven thousand and two hundred dollars rose to 5.08 percent from 4.92 percent, and the average contract interest rate for a fifteen year fixed rate mortgage increased to 4.79 percent from 4.68 percent. 

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