Mortgage refinance demand picked up this week, with applications for new loans up by a seasonally adjusted 4 percent over the week before, according to today's figures from the Mortgage Bankers Association (MBA).
Refinance applications increased despite a continuing trend toward higher interest rates that has seen average rates on the most popular type of loan increase in seven out of the last eight weeks.
Meanwhile, applications for mortgages to purchase a home increased a seasonally adjusted two percent over the week before. More significantly, purchase applications were up 16 percent from the same week one year ago and were at their highest adjusted level since May 2010.
Refinancing made up 78 percent of all mortgage applications, down from 79 percent the previous week and the lowest share of total applications since last July.
Rates up across the board
Average interest rates on conventional 30-year fixed-rate mortgages rose to 3.73 percent last week, according to the MBA, up from 3.67 percent the week before. The average on 15-year mortgages rose to 3.00 percent, up from 2.95 percent previously.
For FHA mortgages, the average on 30-year fixed-rate loans rose to 3.53 percent, up from 3.48 percent the week before, while the average on 30-year jumbo mortgages (over $417,500) rose to 3.96 percent, up from 3.95 percent.
Finally, initial interest rates on 5/1 adjustable rate mortgages (ARMs) jumped to 2.72 percent, up from 2.60 percent the week before.
All figures are based on mortgages with an 80 percent loan-to-value ratio. The MBA weekly survey covers 75 percent of all U.S. mortgage applications.