Quicken Loans chief economist Bob Walters noted that application volume fell even though rates remained low. The good news is that “with spring right around the corner, which marks the start of the home buying season, I’d expect to see much improved figures in the coming months,” Walters said.
The Refinance Index decreased 8% from the previous week, while the seasonally adjusted Purchase Index decreased 4%. However, the unadjusted Purchase Index was 6% higher than the same week one year ago. The share of purchase applications going to government mortgage programs decreased to 33% and is at its lowest level since January 2009.
The share of refi applications is at its lowest level since last May, falling to 75% from 76% the week prior. However, the HARP share of these applications increased to 31% from 30% the prior week.
The average contract rate for the 30-year conforming FRM (MBA defines this as a loan with a balance of $417,500 or under) increased one basis point to 3.82%. Federal Housing Administration-insured loans had an average contract rate for the week of 3.53%, unchanged from the previous week.
Jumbo 30-year FRMs saw its average contract rate increase five basis points to 3.95%. MBA said the rate for the 15-year FRM increased by one basis point to 3.02%.
The share of adjustable rate mortgages remains at 5% of the week’s loan applications; the average contract rate for the 5/1 ARM fell three basis points to 2.59%.
Backing up Walters’ feelings about low rates is the Zillow Mortgage Rate Tracker, which provides its data on a real time basis. It found that on Tuesday, the rate on the 30-year FRM is at 3.46%, down nine basis points from 3.55% at the same time last week. It hovered between 3.45% and 3.55% for the majority of the past week.
"Rates fell slightly this week, as unease about the viability of the Cyprus bailout brought euro zone stability concerns back to the forefront," said Erin Lantz, director of Zillow Mortgage Marketplace.
"This coming week, we expect rates to remain fairly steady unless euro zone issues worsen dramatically or Wednesday's Federal Reserve meeting suggests a significant change in monetary policy."