Mortgage applications increased for the fourth straight week last week as mortgage rates declined for the third straight week, the Mortgage Bankers Association (MBA) said Wednesday.
According to data from the MBA’s Weekly Mortgage Applications Survey for the week ended March 24, the Market Composite Index — a measure of mortgage loan application volume — increased 2.9% on a seasonally adjusted basis from a week earlier. Unadjusted, the index increased 3% from a week earlier.
The Refinance Index increased 5% from the previous week but remained 61% below the same week last year.
The seasonally adjusted Purchase Index increased 2% from the previous week. Unadjusted, the Purchase Index increased 2% from the previous week, but was 35% lower than the same week last year.
Mortgage Rates Fall
“Application activity increased as mortgage rates declined for the third straight week,” said Joel Kan, MBA’s vice president and deputy chief economist. “The 30-year fixed rate declined to 6.45%, the lowest level in over a month. While the 30-year fixed rate remained 1.65 percentage points higher than a year ago, homebuyers responded, leading to a fourth straight increase in purchase applications.”
Home-price growth has slowed significantly in many parts of the country, Kan said, “which has helped to improve buyers’ purchasing power. Purchase applications remain over 30% behind last year’s pace, but recent increases — along with data from other sources showing an uptick in home sales — is a welcome development.”
Kan added that while refinance activity also picked up last week, it remains far below last year’s pace. “Most homeowners still have rates significantly lower than current levels, leaving only a small pool of borrowers with an incentive to refinance,” he said.
The refinance share of mortgage activity increased to 29.1% of total applications from 28.6% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.7% of total applications.
The FHA share of total applications remained unchanged from the previous week at 12.3%. The VA share of total applications dipped to 11.6% from 11.7% the previous week.
The USDA share of total applications remained unchanged at 0.5%.
Mortgage rates
Note: The points listed include the origination fee and are for 80% loan-to-value (LTV) ratio loans.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) slipped to 6.45% from 6.48%, with points decreasing to 0.62 from 0.66. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) dipped to 6.27% from 6.30%, with points decreasing to 0.54 from 0.55. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA ticked up to 6.33% from 6.32%, with points decreasing to 0.93 from 1.07. The effective rate decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.84% from 6.02%, with points decreasing to 0.57 from 0.60. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs increased to 5.62% from 5.58%, with points increasing to 0.91 from 0.75. The effective rate increased from last week.
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.
