After the previous week’s monumental rise, U.S. mortgage applications fell back to earth and declined 5 percent for the week ending Jan. 20, according to weekly data released today by the Mortgage Bankers Association. Mortgage applications for purchases dropped 9.7 percent while applications for refinancings, which comprised 81.3 percent of total applications compared to 82.2 percent the previous week, declined 5.2 percent.
Interest rates for mortgages largely increased for the week, led by 15-year fixed-rate mortgages, whose rates increased seven-hundredths of a percentage point to 3.40 percent. Meanwhile, rates for 30-year fixed-rate mortgages with conforming loan balances increased to 4.11 from 4.06 percent and rates for 30-year mortgages backed by the FHA rose to 3.97 percent from 3.91 percent. Rates for 30-year fixed-rate jumbo loans actually decreased slightly to 4.39 percent from 4.40 percent.
The MBA also reported overall December refinancing activity by type of mortgage, and found that 56.3 percent of all borrowers chose 30-year, fixed-rate loans. On the other hand, 24.3 percent chose fixed-rate, 15-year mortgages. — Adam Fusfeld