The Market Composite Index, a measure of mortgage loan application volume, increased 55.4 percent on a seasonally-adjusted basis
from one week earlier to the highest level since April 2009. On an unadjusted basis, the Index increased 54 percent
compared with the previous week. The Refinance Index increased 79 percent
from the previous week to the highest level since April 2009, and was 479 percent higher than the same week one year ago. The seasonally-adjusted Purchase Index increased six percent
from one week earlier. The unadjusted Purchase Index increased seven percent compared with the previous week and was 12 percent higher than the same week one year ago.
“Market uncertainty around the coronavirus led to a
considerable drop in U.S. Treasury rates last week, causing the 30-year fixed rate to fall and match its December 2012 survey low of 3.47 percent. Homeowners rushed in, with refinance applications jumping 79 percent–the largest weekly increase since November 2008,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “With last week’s increase, the refinance index hit its highest level since April 2009. The purchase market also had a solid week, with activity nearly 12 percent higher than a year ago. Prospective buyers continue to be encouraged by improving housing inventory levels in some markets and very low rates.”
The refinance share of mortgage activity increased to 76.5 percent of total applications from 66.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.9 percent of total applications. The FHA share of total applications decreased to 6.9 percent from 9.3 percent the week prior. The VA share of total applications increased to 13.1 percent from 10.5 percent the week prior. The USDA share of total applications decreased to 0.3 percent from 0.4 percent the week prior.
“Taking into the account the current economic situation and how much rates have fallen, the MBA is nearly doubling its 2020 refinance originations forecast to $1.2 trillion, a 37 percent increase from 2019 and the strongest refinance volume since 2012,” said Kan. “As lenders handle the wave in applications and manage capacity, mortgage rates will likely stabilize but remain low for now. This in turn will support borrowers looking to refinance or purchase a home this spring.”
