For the third week in a row mortgage application volume increased as refinance apps have reached their highest level since the start of December, according to new figures released by the Mortgage Bankers Association.
The seasonally adjusted application volume index increased 5.0% over the previous week, while the refinance index increased 7.7%.
Scott Buchta, an analyst with Braver Stern, said, "Our view is that this rise in refinancing applications reflects noise in the 5.0% coupon, especially given the proximity of these loans to the current 5.01% effective mortgage rate. The refi index remains at a depressed level when looking at the last two refinancing cycles."
The seasonally adjusted purchase index fell 1.9% from the previous week, but on an unadjusted basis, increased 3.1%. Compared with one year prior, the purchase index is down 16.0%.
According to Michael Fratantoni, MBA's vice president of research and economics, the level of purchase applications remains low and this means that home sales are unlikely to pick up any time soon.
The market share of refi applications was 73.0%, up from 72.1% one week prior. MBA tracks activity through its proprietary application index.
Fratantoni added, "Mortgage rates have moved somewhat lower since the beginning of the year, as mixed data on the job market continue to cloud the outlook for the economy."
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.77% from 4.78%, with points increasing to 1.20 from 0.91 (including the origination fee) for 80% loan-to-value ratio loans. The effective rate increased from last week.
Rates for the 15-year FRM increased one basis point to 4.16%. Points decreased from 1.01 to 0.90.
