Rising interest rates took their toll on mortgage applications with new business volume falling by almost 8% for the week ending March 25, according to new figures compiled by the Mortgage Bankers Association.
The trade group found that refinance applications, on a seasonally adjusted basis, suffered the most, declining 10% while purchase money loans only dropped by 1.7%. Compared to the same period a year ago purchase applications fell 22% but that's on an unadjusted basis. (MBA uses an index to track activity.)
"As rates climb back to 5%, fewer homeowners have both the incentive and the ability to refinance," said Michael Fratantoni, MBA's vice president of research and economics. "Purchase volume remained roughly flat as we enter what is typically the peak home buying season."
Meanwhile, refi applications accounted for 64.3% of all new business compared to 66.4% the week prior. This is the second lowest refi share since May 2010.
As of March 25 the average contract interest rate for a 30-year fixed-rate loan was 4.92%, an increase of 12 basis points from the week before. However, points charged fell to 83 bps from 96 (including the origination fee). This measure covers only 80% LTV loans.
The average rate for a 15-year FRM increased 14 basis points to 4.16%. On this loan points increased to 0.99 from 0.90.
