Mortgage Rates

Weekly Mortgage Update

By: FreeValues Staff, October 12, 2016

The interest rate on 30-year fixed mortgages came in at the highest level since September of 2016, rising to 3.68 percent, from 3.62 percent, according to the Oct. 12 Weekly Mortgage Applications Survey conducted by the Mortgage Bankers Association (MBA).

Rates for jumbo-loan and Federal Housing Administration-backed mortgages logged increases, as well. Jumbo-loan rates are up to 3.67 percent, from 3.60, and Federal Housing Administration-backed rates are up to 3.54 percent, from 3.50 percent. Both rates are down from the previous week. Again, both are at the highest level since last month.

Mortgage Rates - 10/12/16

Not surprisingly, mortgage-application activity plummeted 6 percent for the period ending Oct. 7, effectively erasing the previous week’s 2.9-percent gain.Of those applications, the home-refinancing share dropped to 62.4, from 63.8 percent.

Mortgage Shares - 10/12/16

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Additionally, the adjustable-rate-mortgage share dropped to 4.1 percent, compared with last week’s 4.5 percent.

“As incoming economic data reassured investors regarding U.S. growth, and financial markets returned to viewing a December Fed hike as increasingly likely, mortgage rates rose to their highest level in a month last week,” MBA Chief Economist Mike Fratantoni told Scotsman Guide. “Mortgage rates remain quite low by historical standards, but even a modest increase like last week’s is sufficient to significantly reduce refinance application volume.”

Financial adviser Michael Yoshikami all but told NBC News interest rates will spike before the end of the year. That could lead to more hesitancy on the part of homebuyers to purchase and homeowners to refinance.

“There’s a very good chance they go up in December, barring some disastrous jobs report,” Yoshikami said. “I do think you’re going to see volatility over the course of the next three months.”

Headquartered in Washington D.C., the Mortgage Bankers Association is the national association representing the real-estate finance industry. Since 1990, it has conducted a weekly survey that covers more than 75 percent of all U.S. residential-mortgage applications. Respondents include commercial banks, mortgage bankers and thrifts.