Rate Decline Drives Application Increase
Mortgage application volume increased 14.8% on a seasonally adjusted basis for the week ended March 1, with strong rebounds in both refinance and purchase volume as rates declined, according to the Mortgage Bankers Association.
The seasonally adjusted purchase index is up 15% from the previous week and when compared with the same week last year on an unadjusted basis, it is 17% higher.
The MBA’s Refinance Index, which is not adjusted, is also up 15% from the previous week. The share of refi applications remained at 77%.
Quicken Loans chief economist Bob Walters said, “With low housing inventories, home prices are seeing a modest boost and are spending less time on the market. All of these indicators point to a healing housing market.”
Zillow, which tracks mortgage rates on a real time basis, noted a big drop in the middle of last week due to questions stemming from the Italian elections and the sequester.
The average contract rate for the 30-year conforming FRM (MBA defines this as a loan with a balance of $417,500 or under) decreased seven basis points to 3.7%. Federal Housing Administration-insured loans had an average contract rate for the week of 3.47%, also a decline of seven basis points from the week of Feb. 22.
Jumbo 30-year FRMs saw its average contract rate decline 13 basis points to 3.8%. The MBA said the rate for the 15-year FRM declined by seven basis points to 2.96%.
The share of adjustable-rate mortgages remains at 4% of the week’s loan applications; the average contract rate for the 5/1 ARM fell 10 basis points to 2.1%.