According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates moved higher last week. Rates were up from the week before for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. The increase follows recent declines, which brought rates to a two-month low the week before.
Joel Kan, MBA's vice president and chief economist, says higher rates caused some first-time buyers to hesitate. “Last week's increase in mortgage rates prompted a pullback in application activity,” Kan said. “With more first-time home buyers in the market, we continue to see increased sensitivity to rate changes.”
Last week, there was a 10 percent drop in FHA purchase applications and the average loan size reached its highest level in a month – both signs of slower activity among younger buyers. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.
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