The MBA's Market Composite Index, a measure of weekly application volumes based on surveys of the trade group members, jumped up a seasonally adjusted 9.7% for the period ending March 1. The first upturn since early February follows a 5.6% decline seven days earlier. On a year-over-year basis, activity was also 6.6% lower.
Declining interest rates, although minimal, brought borrowers back unlike the previous week despite similar flattening, according to Michael Fratontoni, MBA senior vice president and chief economist.
The average 30-year fixed contract rate for mortgages with conforming balances of $766,550 in most markets inched down 2 basis points to 7.02% from 7.04%. Points used to buy down the rate remained at 0.67 week over week for 80% loan-to-value ratio applications.
"The latest data on inflation was not markedly better nor worse than expected, which was enough to bring mortgage rates down a bit," Fratantoni said in a press release. "Mortgage applications were up considerably relative to the prior week, which included the President's Day holiday."
Both purchases and refinances saw volumes rise. The MBA's Purchase Index surged a seasonally adjusted 10.6% compared to one week earlier. Volumes, though, remained 8.6% below year-ago levels, with supply levels and affordability concerns contributing to a sluggish housing market.
Of particular note was growing interest in loans backed by
But even with the growth in government-sponsored applications typically used for affordably priced properties, the average purchase-loan size still grew to $442,500, due to both elevated conventional activity and ongoing limited inventory. The mean amount was the second-highest mark this year, climbing higher by 2.9% from the prior survey's average of $430,000.
New-listing trends represent "a real positive for the spring buying season given the lack of for-sale inventory," Fratantoni said.
But greater consumer interest has not led to a similar rise in purchase activity yet. Earlier this week, brokerage Housecanary also issued its February report and determined the number of net new listings and contract volume down by 10.6% and 2.2% from 12 months earlier.
Meanwhile, the MBA's Refinance Index picked up momentum with an 8.1% week-over-week gain. But the index reading was also 3.8% lower than where it stood during the same period last year. At the same time, the share of refinances relative to total activity shrank to 30.2% from 31.1% the previous week.
Despite the growth in FHA and other government-backed volumes, the share of federally sponsored applications decreased on a weekly basis due to an even larger surge in conventional lending.
The share of FHA-guaranteed applications declined to 12.7% from 13% the previous week, while the slice sponsored by the Department of Veterans Affairs decreased to 11.4% from 11.7%. Loan-applications backed by the U.S. Department of Agriculture accounted for the same 0.5% share.
As with the conforming average, other mortgage rates remained close to the prior week's levels among MBA's lenders. The 30-year fixed contract jumbo average came in 1 basis point higher, edging up to 7.21% from 7.2%. Points decreased to 0.36 from 0.57.
The average rate of 30-year fixed FHA-backed applications stayed at the prior survey's mark of 6.86%. Points, though, fell by 9 basis points to 0.9 from 0.99.
The 15-year fixed contract average decreased to 6.66% from 6.7% seven days earlier. At the same time, borrowers typically used 0.67 worth of points, down from 0.68, for 80% LTV-ratio loans.
The 5/1 adjustable-rate mortgage averaged 6.38%, climbing from 6.33% the previous week. Points increased to 0.67 from 0.58 for the loans, which start fixed for a 60-month period. The share of all ARM applications relative to total activity, grew to 7.7% from 7.5% in the prior survey.
