Application volume slows even as mortgage rates drop
Refinance applications reached their lowest share in more than seven years even as mortgage rates fell last week, according to the Mortgage Bankers Association.
Total mortgage application volume decreased 0.8% for the week ended March 24, driven by a 3% decrease in the refinance index from the previous week.
The refinance share of mortgage activity decreased to 44% of total applications, the lowest percentage since October 2008, from 45.1% the previous week.
Although the Federal Open Market Committee raised short-term interest rates on March 15, the average for the 30-year fixed-rate mortgage slipped 13 basis points.
The seasonally adjusted purchase index increased 1% from one week earlier, while the unadjusted purchase index increased 2% compared with the previous week and was 4% higher than the same week one year ago, the MBA's Weekly Application Survey found.
The adjustable-rate mortgage share of activity decreased to 8.5% of total applications from 9%, while the Federal Housing Administration share decreased 1 basis point to 10.8% from the week prior.
The VA share of total applications increased to 11% from 10.1% and the USDA share of total applications increased 1 basis point to 1%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.33% from 4.46%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100), the average contract rate decreased to 4.26% from 4.4%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.24% from 4.33%, while for 15-year fixed-rate mortgages, the average decreased to 3.57% from 3.68%.
The average contract interest rate for 5/1 ARMs decreased to 3.3% from 3.41%.