Overall applications for home purchases increased for the third-straight week while refinance activity increased for the fourth, their lowest level in over 3 years, economists said.
According to the latest Market Composite Index from the Mortgage Bankers Association (MBA)—its measure of mortgage loan activity volume and includes purchases and refinances—increased a notable 11.0% on a seasonally adjusted basis from last week’s 0.4% increase, for the week ending Feb. 27. On an unadjusted basis, the Index increased 12.1% compared with the previous week.
“Mortgage applications increased last week, driven by continued strength in refinance activity, as mortgage rates stayed near their lowest level since 2022,” said Joel Kan, MBA’s vice president and deputy chief economist. “Refinance applications increased for the fourth-straight week to the strongest pace since 2022, with conventional refinances up 20 percent. The increase in the average loan size for refinances indicates that more borrowers with larger loan sizes are seeking to lower their monthly payments.”
MBA’s Refinance Index increased 14.3% from the previous week and was 109% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 6.1% from one week earlier. The unadjusted Purchase Index increased 8.9% compared with the previous week and was 10% higher than the same week one year ago.
“Purchase applications also moved higher, with the week’s pace almost 10 percent ahead of last year’s pace, as lower rates and growing levels of housing inventory continue to support homebuyer interest,” Kan added
According to MBA’s data this week, the refinance share of mortgage activity increased to 59.8% of total applications from 58.6% the previous week. The adjustable-rate mortgage (ARM) share of activity increased 8.8% of total applications.
Government-backed loan activity was down overall this week with MBA showing the FHA share of total applications decreasing to 15.8% from 16.1% the week prior. The VA share of total applications decreased 17.1% from 18.7% the week prior and the USDA share of total applications remained unchanged at 0.4% from the week prior.
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