A decline in interest rates buoyed mortgage demand for another week.
Mortgage applications increased by 7.1% on a seasonally adjusted basis during the week ending March 8, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey. It was the second increase in a row.
“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,” Mike Fratantoni, MBA’s senior vice president and chief economist, said in a statement.
Purchase loan application volume increased by 5% from one week earlier but remains about 11% below the level of the same time last year. By contrast, refinance volume picked up by 12%, driven by a large increase in the government refinance index (up 24%).
“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,” Fratantoni said.
As of Wednesday, the 30-year fixed rate on HousingWire’s Mortgage Rates Center stood at 7.06%.
The MBA survey shows that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) decreased to 6.84%, down 18 basis points from the week before. Meanwhile, rates on jumbo loans (balances greater than $766,550) decreased to 7.04%, down 17 basis points from the prior week.
The Federal Housing Administration (FHA) share of total applications decreased to 12% last week, down from 12.7% the week before. The U.S. Department of Veterans Affairs (VA) share increased to 12.2%, up from 11.4% the week before. And the U.S. Department of Agriculture (USDA) share remained unchanged at 0.5%.
The MBA survey, conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.
