New seasonally adjusted purchase loan application volume is up 1% for the week ended March 19, according to the Mortgage Bankers Association, and observers are attributing that to two trends. Overall application volume is down 4% seasonally adjusted as the Refinance Index fell 6% on an unadjusted basis.
Quicken Loans chief economist Bob Walters said, “Purchase demand is growing regardless of lower housing inventory, creating fierce competition among the most sought-after properties. I expect
MBA vice president of research and economic Mike Fratantoni attributes the rise “to an almost 7% increase in purchase applications for government loans. This was likely driven by borrowers applying for loans prior to the scheduled increase in FHA premiums that took effect on April 1.”
Still, along the same lines as the comment made by Walters, Fratantoni continued, “On a year-over-year basis, purchase applications are up about 4% (on an unadjusted basis) in line with the trend we are seeing in home sales volumes.”
The share of refi applications continues to decline, falling to 74% from 75%
The average contract rate for the 30-year conforming FRM (MBA defines this as a loan with a balance of $417,500 or under) decreased 3 basis point to 3.76%. Federal Housing Administration-insured loans had an average contract rate for the week of 3.48%, a drop of three basis points from the previous week.
Jumbo 30-year FRMs saw its average contract rate decrease five basis points to 3.85%. MBA said the rate for the 15-year FRM fell by three basis points to 2.99%.
The share of adjustable-rate mortgages remains at 5% of the week’s loan applications; the average contract rate for the 5/1 ARM increased by two basis points to 2.6%.
