Mortgage loan applications are up for the first time in four weeks despite interest rates rising to their highest levels of the year, according to a recent survey of national mortgage lenders. The survey stated its poll of mortgage loan applications for this week jumped 6.1 percent; this is a reversal from the prior three weeks.
Mortgage interest rates for a 30 year fixed interest-rate loan, not taking into consideration fees, was 6.09 percent this week; this is up 0.11 points from the week before and 0.01 points higher than the last high of 2005. The 30 year fixed interest rate is considered to be the industry benchmark and has risen since late June where it was 5.47 percent. This was the lowest interest rate thus far in 2005. It is also significantly higher than one year ago when the rate stood at 5.64 percent.
Mortgage Refinancing applications rose 4.5 percent this week. Fixed interest rate 15 year mortgages are 5.62 percent, this is up from 5.55 percent the week before. Interest rates for one year adjustable interest-rate mortgages (ARM) rose to 5.34 percent, up from 5.26 percent. Adjustable rate mortgage loans typically have low payments in the beginning and allowed borrowers to purchase homes they may not be able to afford with a traditional fixed interest-rate mortgage. However, the interest rate difference between 30 year fixed interest rate mortgages and the one year adjustable rate mortgage has decreased over the past weeks, subsequent demand for an ARM loans has fallen off.
ARM loans account for 29.3 percent of mortgage applications in this survey; this is significantly down from the week before. Demand for adjustable rate mortgage loans peaked in 2005 with 36.6 percent of mortgage applications in March. Refinancing mortgage loans has decreased as well, dropping to 42.8 percent of applications, down from 43.5 percent in this survey.