Purchase mortgage applications gained ground last week for the first time since mid-January. The Mortgage Bankers Association (MBA) said the volume of applications for home purchases increased by 6.0 percent on a seasonally adjusted basis during the week ended February 23. The last time the index moved higher was during the week ended January 19.

Overall applications volume, as measured by MBA's Market Composite Index, was up 2.7 percent on a seasonally adjusted basis compared to the previous week.  The President's Day holiday, which shortened the week, also confounded unadjusted numbers.  The unadjusted versions of the Composite and Purchase Indices were each down by 6.0 percent. The unadjusted Purchase Index was 3 percent higher than during the same week in 2017.

Refinancing volume continues to retract. The Refinancing Index dropped 1.0 percent compared to the previous week and the share of refinancing decreased to 41.8 percent of total applications. The share was 44.4 percent during the week ended February 16.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

The FHA share of total applications increased to 10.3 percent from 9.9 percent the week prior and the VA share 0.7 point to 10.7 percent.  The USDA share of activity was unchanged at 0.8 percent.  

Interest rates were mixed. The average contract rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $453,100 or less was unchanged from the previous week at 4.64 percent.  Points increased to 0.63 from 0.61 but the effective rate was also unchanged.   

The rate for jumbo 30-year FRM, loans with balances greater than $453,100, dropped 5 basis points to 4.57 percent. Points increased to 0.51 from 0.50 and the effective rate moved lower.   

The average rate for 30-year FRM backed by the FHA jumped 10 basis points to 4.68 percent, the highest rate since April 2011.  Points rose from 0.71 to 0.75, and the effective rate also increased.  

Fifteen-year fixed-rate mortgages were also at that product's highest level since April 2011, 4.07 percent with 0.59 point. The previous week the rate was 4.02 percent with 0.66 point.  The effective rate was also higher.  

Despite having the highest contract interest rate since February 2011, adjustable rate mortgage applications continued to gain market share, rising to 6.7 percent of total applications. This is a gain of 1.17 points since the first of the year. The average contract rate for 5/1 ARMs was 3.85 percent with 0.59 point, up from 3.72 percent with 0.39 point the prior week.  The effective rate also increased.

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage applications.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.