Mortgage Applications increased for the second consecutive week, according to the Mortgage Bankers Association’s (MBA) most recent Weekly Mortgage Applications Survey. The 2% increase in mortgage applications builds on the 2.5% climb from the previous week after continuous decreases for the prior eight weeks.
Key findings:
- The market Composite Index increased 2.0% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 3% compared to the previous week.
- The Refinance Index decreased 2% from the previous week and was 72% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 5% from one week earlier.
- The unadjusted Purchase Index increased 5% compared to the previous week and was 8% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 32.4% of the total applications from 33.9% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 10.8% of total applications.
- The FHA share of total applications decreased to 10.5% from 11.1% the week prior.
- The VA share of total applications increased to 10.5% from 10.3% the week prior.
- The USDA share of total applications increased to 0.5% from 0.4% the previous week.
- The average contract interest rate for 30-year-fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.53% from 5.36% with points increasing to 0.73 from 0.63 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
- The average contract interest rate for 30-year-fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 5.08% from 4.92%, with points decreasing to 0.42 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 5.37% from 5.27%, with points increasing to 0.87 from 0.85 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 4.79% from 4.68%, with points increasing to 0.80 from 0.76 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs increased to 4.47% from 4.25%, with points decreasing to 0.73 from 0.78 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The takeaway:
“The increase in mortgage applications last week was driven by a strong gain in application activity for conventional and government purchase loans, even as mortgage rates rose to their highest level—5.53%—since 2009,” said Joel Kan, MBA’s associate vice president of Economic And Industry Forecasting. “Despite a slow start to this year’s spring home buying season, prospective buyers are showing some resiliency to higher rates. Purchase activity has now increased for two straight weeks. More borrowers continue to utilize ARMs to combat higher rates. The share of ARMs increased to 11% of overall loans and to 19% by dollar volume.”
Added Kan, “The rapid rise in mortgage rates continues to hit the refinance market, with activity 70% below a year ago. Most homeowners refinanced to lower rates in the past two years.”
