Mortgage applications increased 4.8% from one week earlier and rose for the fourth time in five weeks as key interest rates held steady, according to the Mortgage Bankers Association.

The MBA's Weekly Mortgage Applications Survey for the week ending March 23 found that the refinance index increased 7% from the previous week.

The refinance share of mortgage activity increased to 39.4% of total applications from 38.5% the previous week.

The market composite index, a measure of mortgage loan application volume, increased 4.8% on a seasonally adjusted basis from one week earlier.

Mortgage applications recover

The seasonally adjusted purchase index increased 3% from one week earlier. The unadjusted purchase index increased 4% compared with the previous week and was 8% higher than the same week one year ago.

"Purchase applications increased for the third week in a row, up 3.1% on a seasonally adjusted basis from the previous week," said MBA economist Joel Kan in a press release.

"We remain cautiously optimistic that purchase activity will continue to pick up as we enter the spring home buying season. Rates slightly rose last week based on fears of trade conflicts with China and other countries, but were offset by what we saw as a positive economic outlook from the Fed."

Adjustable-rate loan activity remained unchanged at 7%, while the share of Federal Housing Administration-guaranteed loans decreased to 9.9% from 10.3% the week prior.

The share of applications for Veterans Affairs-guaranteed loans decreased to 10.3% from 10.7% and the U.S. Department of Agriculture/Rural Development share remained unchanged at 0.8% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased 1 basis point to 4.69%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 5 basis points to 4.6%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 6 basis points to 4.75%. For 15-year fixed-rate mortgages the average rate decreased 3 basis points to 4.09%. The average contract interest rate for 5/1 ARMs increased 3 basis points to 3.92%.

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