The volume of mortgage applications increased for the third straight week last week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 17.
The MBA said its Market Composite Index, a measure of mortgage loan application volume, increased 3% percent on a seasonally adjusted basis from a week earlier. Unadjusted, the index also increased 3% from the previous week.
The Refinance Index increased 5% from the previous week, but was 68% lower than the same week last year.
The seasonally adjusted Purchase Index increased 2% from a week earlier. Unadjusted, the Purchase Index increased 3% from the previous week but it remains 36% lower than the same week last year.
"Treasury yields declined last week, driven by uncertainty over the health of the banking sector and worries about the broader impact on the economy,” said Joel Kan, MBA’s vice president and deputy chief economist. “Mortgage rates declined for the second week in a row, with the 30-year fixed rate dropping to 6.48%, the lowest level in a month.”
“However,” he continued, “mortgage rates have not dropped as much as Treasury rates due to increased MBS (mortgage-backed securities) market volatility. The spread between the 30-year fixed and 10-year Treasury remained wide, at around 300 basis points, compared to a more typical spread of 180 basis points.”
Kan added that both purchase and refinance applications “increased for the third week in a row, as borrowers took the opportunity to act, even though overall application volume remains at relatively low levels.”
The refinance share of mortgage activity increased to 28.6% of total applications from 28.2% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.6% of total applications.
The FHA share of total applications decreased to 12.3% from 12.9% the previous week. The VA share of total applications dipped to 11.7% from 11.9% a week earlier. The USDA share of total applications remained unchanged at 0.5% for the fourth straight week.
Mortgage rates
Note: The points listed include the origination fee and are for 80% loan-to-value (LTV) ratio loans.
All of the mortgage rates tracked in the MBA’s weekly survey saw decreases in the effective rate from a week earlier.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.48% from 6.71%, with points decreasing to 0.66 from 0.79.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) decreased to 6.3% from 6.39%, with points decreasing to 0.55 from 0.61.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.32% from 6.58%, with points decreasing to 1.07 from 1.20.
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.02% from 6.14%, with points decreasing to 0.60 from 0.77.
- The average contract interest rate for 5/1 ARMs decreased to 5.58%t from 5.69%, with points decreasing to 0.75 from 0.87.
The MBA’s survey covers over 75% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.
