The Mortgage Bankers Association's Weekly Mortgage Application Survey reported a 2.5% decrease in mortgage applications for the week ending March 19. On an unadjusted basis, the Market Composite Index decreased 2%.
The report also revealed that the Refinance Index decreased 5% and was 13% lower year-over-year. Meanwhile, the seasonally adjusted Purchase Index increased 3% and was 26% higher year-over-year.
"The 30-year fixed mortgage rate increased to 3.36% last week and has now risen 50 basis points since the beginning of the year, in turn shutting off refinance incentives for many borrowers. Refinance activity dropped to its slowest pace since September 2020, with declines in both conventional and government applications. Mortgage rates have moved higher in tandem with Treasury yields, as the outlook for the U.S. economy continues to improve amidst the faster vaccine rollout and states easing pandemic-related restrictions," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "Purchase applications were strong over the week, driven both by households seeking more living space and younger households looking to enter homeownership. The purchase index increased for the fourth consecutive week and was up 26% from last year's pace. The average purchase loan balance increased again, both by quickening home-price growth and a rise in higher-balance conventional applications."
"Inadequate housing inventory continues to put upward pressure on home prices. As both home-price growth and mortgage rates continue this upward trend, we may see affordability challenges become more severe if new and existing supply does not significantly pick up," cautioned Kan.
The refinance share of mortgage activity dipped to 60.9% of total applications compared to 62.9 the previous week. The adjustable-rate mortgage share of activity increased to 3.2% of total applications.
Additionally, the FHA share of total applications remained stagnant at 11.7%, the VA share decreased to 9.8% from 10.3% the previous week and the USDA share remained stagnant at 0.4%.
Click here to view the MBA's full WMAS.
