"The 30-year mortgage rate increased to its highest level since early January last week, with rates moving up sharply towards the end of the week. The refinance index has fallen to its lowest level since the week ending January 9th," said Michael Fratantoni, chief economist for the MBA.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.84 percent from 3.79 percent, with points increasing to 0.31 from 0.29 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans, according to the MBA.
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Application volume was still up considerably from four weeks ago, largely due to a change to lower premiums by the Federal Housing Administration, the government insurer of home loans. FHA refinance volume continued to rise, while conventional refinancing fell dramatically. FHA refinance applications were up 223 percent from four weeks ago and FHA purchase applications were up 39 percent. The new lower FHA premiums went into effect Jan. 26.