After a drop of 9% the week prior, mortgage application volume fell 13.2% on an adjusted basis during the week ended Feb. 13, compared to the previous week, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, volume was down 12% compared with the previous week.
Applications for refinances were down 16% while applications for purchases were down 7%.
On an unadjusted basis, applications for purchases fell 2% compared with the previous week and were 1% higher compared to the same week one year ago.
In a release, Mike Fratantoni, chief economist for the MBA, attributed the drop in volume to the recent hike in mortgage interest rates.
‘Mortgage rates increased to their highest level since the beginning of the year last week, and application volume dropped sharply as a result, particularly for refinances,’ Fratantoni says. ‘The market index declined to its lowest level since the week ending Jan. 2, as purchase application activity decreased seven percent and refinance applications decreased 16 percent. 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.’
The average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 3.93%, up from 3.84% the previous week.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 3.92%, up from 3.90% the week prior.
The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 3.73%, up from 3.72%.
The average rate for a 15-year FRM was 3.24%, up from 3.15%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.09%, up from 3.07%.
The ARM share of activity decreased to 5.3% of total applications.
Looking at application volume by loan type, applications for mortgages backed by the FHA represented 15.2% of all applications, up from 14.1% the previous week. Applications for Veterans Affairs mortgages represented 8.0% of all loans, down from 8.3% the previous week. Applications for mortgages through the U.S. Department of Agriculture were 0.9% of all applications, up from 0.7% the previous week.