Mortgage application volumes increased for a
The MBA's Market Composite Index, a measure of weekly loan activity based on surveys of association members, increased a seasonally adjusted 6.5% for the seven-day period ending March 10. While up for the second consecutive survey period, volumes remained 56.8% below their levels of a year ago.
Both purchases and refinances came in higher week over week. The Refinance Index climbed up 4.8% but still landed 74.1% lower on an annual basis. At the same time, the share of refinances relative to total application volume slid to 28.2% from 28.9% seven days earlier in spite of the increase in volume.
"The dip in rates did bring some borrowers back," said Joel Kan, MBA's vice president and deputy chief economist, in a press release.
Meanwhile, the seasonally adjusted Purchase Index picked up at an even larger pace of 7.2%. But compared to the same week in 2022, numbers sat 42% lower.
Developments leading to the
"While lower rates should buoy housing demand, the financial market volatility may cause buyers to pause their decisions," he said.
A pullback in interest rates in January, combined with the limited number of homes on the market, helped drive both buying activity and purchase amounts higher in early 2023. But after a two-week stretch when average amounts decreased, the mean size recorded on purchase applications headed upward again, rising 1.2% to $430,800 from $425,700 seven days prior.
After increasing a week earlier, the average refinance amount dropped back down, though, to $257,800, a fall of 2.3% from $257,800. The overall average across all new loan applications increased by 0.7% to $382,000 from $379,200 the prior week.
Seasonally adjusted government-backed mortgage volumes jumped by a similar margin as the primary composite index on a weekly basis, while their share of activity remained flat. Applications sponsored by the Federal Housing Administration accounted for 12.9% of all loans compared to 12.8% seven days earlier. At the same time, Department of Veterans Affairs-guaranteed applications edged down to 11.9% from 12%. Loans coming through the U.S. Department of Agriculture took a 0.5% share, the same portion it garnered the previous two weeks.
Fixed interest rates among MBA lenders fell across the majority of loan types last week. The 30-year conforming rate for conventional mortgages with balances below $726,200 dropped 8 basis points to an average of 6.71% from 6.79% a week earlier. Points edged down to 0.79 from 0.8 for 80% loan-to-value ratio loans.
The average interest rate for 30-year fixed-contract jumbo mortgages declined 10 basis points to 6.39% from 6.49% one week prior. Points increased to 0.61 from 0.59.
The contract rate of 30-year FHA-backed fixed mortgages was the week's only exception, as it inched up to 6.58% from 6.56%, while points decreased to 1.2 from 1.21.
Contract rates for 15-year fixed mortgages averaged 6.14%, falling 11 basis points from 6.25% a week earlier. Points decreased to 0.77 from 1.01 for 80% LTV loans.
Hybrid mortgage rates also dropped, with the average of 5/1 contract ARMs sliding 6 basis points to 5.69% from 5.75% seven days earlier. Points decreased to 0.87 from 0.95. The loans bear a fixed rate for five years and become variable thereafter.
Despite the decrease in ARM rates, the share of adjustable-rate mortgage applications relative to overall activity edged back to 8.5% after steadily growing over the past month as fixed mortgage rates surged. A week earlier, ARMs had accounted for 8.6% of all applications.
Where interest rates head in the near term largely depends on the
"Mortgage rates have fallen substantially in recent days in anticipation that Chairman Powell's hawkish statements in his recent testimony before Congress is much less likely to become policy in March than it appeared barely more than a week ago," said Marty Green, principal at law firm Polunsky Beitel Green, in a statement.
