Positive news in the past few weeks pushed bond prices lower and in turn, home loan rates increased in the latest survey from the Mortgage bankers Association (MBA). The MBA reports that the 30-year fixed-rate mortgage rose ten basis points to 4.02% with 0.38 in points for the week ending October 18, 2019. Despite the increase, home loan rates remain just above three-year lows.
The MBA report went on to reveal that the Market Composite Index, a measure of total loan application volume, fell 11.9%, the Refinance Index decreased 17%, and the Purchase Index declined 3.6%. Mike Fratantoni, MBA's senior vice president and chief economist said, "Although purchase applications declined, application volume is still running about 6% ahead of this time last year. Low mortgage rates continue to fuel buyer interest, but supply and affordability challenges persist."
Home prices edged higher in August up 0.2% from July and increased 4.6% from a year ago, according to the Federal Housing Finance Agency (FHFA) in its House Price Index. The FHFA regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. The FHFA produces the nation’s only public, freely available house price indexes (HPIs) that measure changes in single-family house prices based on data that cover all 50 states and over 400 American cities and extend back to the mid-1970s. These government-sponsored enterprises provide more than $6.3 trillion in funding for the U.S. mortgage markets and financial institutions.