Mortgage Applications Surge Again in MBA Weekly Survey

Falling interest rates led to another surge in mortgage applications last week, the Mortgage Bankers Association reported this morning in its Weekly Applications Survey for the week ending Mar. 29.

The Market Composite Index increased by 18.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 18 percent compared to the previous week. The Market Composite Index has increased seven of the past eight weeks.

The (unadjusted) Refinance Index increased by 39 percent from the previous week to its highest level since January 2016. The refinance share of mortgage activity increased to 47.4 percent of total applications from 40.4 percent the previous week.

The seasonally adjusted Purchase Index increased by 3 percent from one week earlier. The unadjusted Purchase Index increased by 4 percent compared to the previous week and was 10 percent higher than the same week one year ago.

The FHA share of total applications decreased to 8.8 percent from 9.3 percent the week prior. The VA share of total applications remained unchanged from 10.4 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

“There was a tremendous surge in overall applications activity, as mortgage rates fell for the fourth week in a row, with rates for some loan types reaching their lowest levels since January 2018,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Refinance borrowers with larger loan balances continue to benefit, as we saw another sizeable increase in the average refinance loan size to $438,900 – a new survey record,”

“We had expected factors such as the ongoing strong job market and favorable demographics to help lift purchase activity this year, and the further decline in rates is providing another tailwind,” Kan added. “Purchase applications were almost 10 percent higher than a year ago. The average loan size for purchase loans declined slightly, as applications for smaller purchase loan sizes exceeded that of higher loan sizes–a positive sign that first-time buyers were increasingly active in the market.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.36 percent from 4.45 percent, with points increasing to 0.44 from 0.39 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 4.21 percent from 4.35 percent, with points decreasing to 0.25 from 0.27 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to 4.41 percent from 4.48 percent, with points unchanged at 0.48 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.78 percent from 3.87 percent, with points decreasing to 0.40 from 0.47 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages remained unchanged at 3.77 percent, with points increasing to 0.38 from 0.30 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 9.5 percent of total applications.

The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.