Homebuyers have been quick to respond to the recent positive fluctuations in housing market conditions, with mortgage applications increasing 2.9% from one week earlier–the fourth-straight week of increases in the wake of three weeks of mortgage rate decreases, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending March 24, 2023.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, increased 2.9% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 3% compared with the previous week.
- The Refinance Index increased 5% from the previous week and was 61% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 2% from one week earlier.
- The unadjusted Purchase Index increased 2% compared with the previous week and was 35% lower than the same week one year ago.
- 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 at 12.3% the week prior.
- The VA share of total applications decreased to 11.6% from 11.7% the week prior.
- The USDA share of total applications remained unchanged at 0.5% from the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.45% from 6.48%, with points decreasing to 0.62 from 0.66 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. 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) decreased to 6.27% from 6.30%, with points decreasing to 0.54 from 0.55 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.33% from 6.32%, with points decreasing to 0.93 from 1.07 (including the origination fee) for 80% LTV loans. 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 (including the origination fee) for 80% LTV loans. 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 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Application activity increased as mortgage rates declined for the third straight week. The 30-year fixed rate declined to 6.45%, the lowest level in over a month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “While the 30-year fixed rate remained 1.65%age points higher than a year ago, homebuyers responded, leading to a fourth straight increase in purchase applications. Home-price growth has slowed markedly in many parts of the country, 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.”
Added Kan, “Refinance activity also picked up last week, but remains 61% 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.”
