Following the usual pattern when mortgage rates decrease, mortgage applications increased this week, up 7.1% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending March 8, 2024. Of note this week was the continued percentage increase of refinance applications, up to 31.6% of total applications from last week’s increase to 30.2%.
Here’s this week’s breakdown:
- The Market Composite Index, a measure of mortgage loan application volume, increased 7.1% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 8% compared with the previous week.
- The Refinance Index increased 12% from the previous week and was 5% higher than the same week one year ago.
- The seasonally adjusted Purchase Index increased 5% from one week earlier.
- The unadjusted Purchase Index increased 6% compared with the previous week and was 11% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 31.6% of total applications from 30.2% the previous week.
- The adjustable-rate mortgage (ARM) share of activity remained unchanged at 7.7% of total applications.
- The FHA share of total applications decreased to 12.0% from 12.7% the week prior.
- The VA share of total applications increased to 12.2% from 11.4% the week prior.
- The USDA share of total applications remained unchanged at 0.5%.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.84% from 7.02%, with points decreasing to 0.65 from 0.67 (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 $766,550) decreased to 7.04% from 7.21%, with points increasing to 0.38 from 0.36 (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 decreased to 6.77% from 6.86%, with points increasing to 0.95 from 0.90 (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 6.37% from 6.66%, with points increasing to 0.77 from 0.67 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs was unchanged at 6.38%, with points decreasing to 0.52 from 0.67 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
MBA’s comments:
“Mortgage rates dropped below 7% last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months,” said Mike Fratantoni, MBA’s SVP and chief economist. “Purchase application volume increased for the week but remains about 11% below last year’s level. By contrast, refinance volume picked up by 12%, with a larger, 24% increase in the government refinance index. While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of rates in the past two years.”
