A major wave of refinancing helped push mortgage applications upward with a vengeance, according to data from the Mortgage Bankers Association (MBA)
for the week ending March 29.
The Market Composite Index increased 18.6 percent on a seasonally adjusted basis from one week earlier
while the unadjusted index rose by 18 percent. The seasonally adjusted Purchase Index increased three percent from one week earlier
and the unadjusted Purchase Index was up by four percent, with the latter 10 percent higher than the same week one year ago. But the serious upward motion came from the Refinance Index, which soared by 39 percent from the previous week
and hit its highest level since January 2016. The refinance share of mortgage activity increased to 47.4 percent of total applications from 40.4 percent the previous week
Among the federal programs, the FHA share of total applications decreased to 8.8 percent from 9.3 percent the week prior while the VA and USDA shares of total applications remained unchanged at 10.4 percent and 0.6 percent, respectively.
“There was a tremendous surge in overall applications activity, as mortgage rates fell for the fourth week in a row–with rates for some loan types reaching their lowest levels since January 2018,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Refinance borrowers with larger loan balances continue to benefit, as we saw another sizeable increase in the average refinance loan size to $438,900–a new survey record. We had expected factors such as the ongoing strong job market and favorable demographics to help lift purchase activity this year, and the further decline in rates is providing another tailwind. Purchase applications were almost 10 percent higher than a year ago. The average loan size for purchase loans declined slightly, as applications for smaller purchase loan sizes exceeded that of higher loan sizes–a positive sign that first-time buyers were increasingly active in the market.”