It has been a tough winter and with spring less than a week away borrowers have apparently not yet emerged from hibernation.   Applications for both home purchases and refinancing were lower during the week ended March 13 in spite of falling interest rates.

The Mortgage Bankers Association (MBA) said this morning that its Market Composite Index, a measure of application volume, decreased 3.9 percent on a seasonally adjusted basis from the week ended March 6.  The index has lost ground in six of the past eight weeks.  On an unadjusted basis, the Index fell 4 percent.  

The Refinance Index decreased 5 percent from the previous week and the refinance share of mortgage activity declined 1 percentage point to 59 percent of all applications, the lowest share since last October.  The seasonally adjusted Purchase Index fell by 2 percentage points while the unadjusted Purchase Index lost1 percent week-over-week and was 1 percent higher than the same week one year ago.

Refinance Index vs 30 Yr Fixed

Purchase Index vs 30 Yr Fixed

FHA-backed loans received a 14.3 percent share of all applications compared to 14.0 percent a week earlier. The VA share of total applications decreased to 10.3 percent from 10.8 percent and the USDA share rose from 0.8 percent to 0.9 percent.

Contract interest rates declined for all mortgage products and effective rates were down for all but the 15-year fixed rate mortgage (FRM) which was unchanged week-over-week.  The average contract interest rate for 30-year FRM with conforming loan balances ($417,000 or less) decreased to 3.99 percent from 4.01 percent with points increasing to 0.40 from 0.39.  Thirty-year FRM with jumbo loan balances (greater than $417,000) had a contract rate of 3.94 percent with 0.33 point compared to 4.02 percent with 0.27 points the previous week.

The rate for 30-year fixed-rate mortgages backed by the FHA declined 6 basis points to 3.74 percent.  Points fell to 0.12 from 0.20.

The average interest rate for 15-year fixed-rate mortgages slipped to 3.28 percent from 3.29 percent.  Points increased to 0.34 from 0.30.

The rate for 5/1 adjustable rate mortgages (ARMs) dropped back 19 basis points for an average contract rate of 2.99 percent.  Points increased to 0.43 from 0.40.  The ARM share of application activity decreased to 5.5 percent from 5.6 percent a week earlier.   

MBA's Weekly Mortgage Applications Survey, which has been conducted since 1990, 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 mortgages with an 80 percent loan-to-value ratio.  Points include the origination fee.