Loan apps up for first time in 7 weeks, as refis rebound

The dip in mortgage rates pushed total application activity higher for the first time in seven weeks, helping both purchase and refinance volume, the Mortgage Bankers Association said.

The MBA's Market Composite Index rose by 8.6% from the previous week on a seasonally adjusted basis and 9% on an unadjusted basis for the week ended April 16. Compared with the same week last year, application volume is down by 3.7%.

"Borrowers acted on the decrease in rates for most loan types, with both conventional and government refinance applications showing gains," Joel Kan, the MBA's associate vice president of economic and industry forecasting, in a press release. "The spring housing market also saw a boost from lower rates, with purchase applications — driven by a jump in conventional applications — increasing over 5%."

The Refinance Index increased 10% on an unadjusted basis from the previous week but was 23% lower than the same week one year ago. Conventional refis were up 10% week-over-week while government mortgage refi volume was up 11.5%.

There was a slight increase in the refinance share of application volume to 60% from 59.2% last week.

Meanwhile purchase applications increased 6% seasonally adjusted and 7% unadjusted compared with the previous week. Compared with a year ago, unadjusted purchase application volume was 57% higher.

"MBA expects the purchase market to remain strong, with the recovering job market and supportive demographics fueling housing demand in the months ahead," added Kan. "The average loan size for purchase applications increased after a few weeks of declines, as fewer homes available for sale make for a competitive buying market that is accelerating home-price growth."

The average loan size for all loan types this week was $330,200. For purchase mortgages it was $406,100 and for refinancings it was $279,500. In last week's survey, the total average was $322,600, with purchases at $399,000 and refis at $269,800.

There was no change from the previous week in the share of adjustable-rate mortgage applications at 3.6%.

Federal Housing Administration-insured mortgage applications increased to 11.3% of the total from 10.8% the week prior. The Veterans Affairs-guaranteed share decreased to 11.5% from 12.1% while the U.S. Department of Agriculture/Rural Housing Service stayed at 0.4%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.20% from 3.27% a week ago, while for jumbo loans the decrease was only 1 basis point to 3.34%.

FHA loans had a 9 bps drop in the average contract rate to 3.15% from 3.24%. And the 15-year FRM only declined by 2 bps to 2.65%.

However, rates on the 5/1 ARM increased 7 bps from last week to 2.67% from 2.6%.