Conventional mortgage applications rise, driven by move-up buyers
Mortgage applications decreased 2.5% from one week earlier, although conventional purchase loan volume and amount is on the rise, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending March 1 found that the refinance index decreased 2% from the previous week. The results for the week ending February 22 included an adjustment for the Presidents Day holiday.
The refinance share of mortgage activity decreased to 40% of total applications from 40.4% the previous week.
"Overall, conventional purchase loans are up 2.1% relative to last year, indicating that homebuyers continue to be inspired by the stable rate environment and the modest increase in housing supply," MBA Chief Economist Mike Fratantoni said in a press release.
"Furthermore, the average loan size for purchase applications increased to a record high, led by a rise in the average size of conventional loans. This suggests that move-up and higher-end buyers have so far become a greater share of the spring market," Fratantoni said.
The seasonally adjusted purchase index decreased 3% from one week earlier, while the unadjusted purchase index increased 11% compared with the previous week and was 1% higher than the same week one year ago.
Adjustable-rate loan activity increased to 7.4% from 7.3% of total applications, while the share of Federal Housing Administration-insured loans increased to 10.3% from 10.2% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 10.4% from 10.7% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.6% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased 2 basis points to 4.67%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate increased 1 basis point to 4.41%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 2 basis points to 4.66%. For 15-year fixed-rate mortgages, the average increased 8 basis points to 4.08%. The average contract interest rate for 5/1 ARMs increased 13 basis points to 4.08%.