Mortgage rates continued to slide during the week ended March 15 and the volume of mortgage application activity picked up in response.   The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage loan application volume, increased 1.6 percent on a seasonally adjusted basis from the previous week and was up 2 percent on an unadjusted basis.

It was refinancing that drove the numbers for the week with that index rising 4 percent. The share of refinancing also grew slightly from to 38.6 percent of the total during the week ended March 8 to 39.2 percent.  Purchase applications rose a modest 0.3 percent on a seasonally adjusted basis while the unadjusted Purchase Index was up by 1.0 percent both from the prior week and from the same week in 2018.

 

Refi Index vs 30yr Fixed

 

 

Purchase Index vs 30yr Fixed

 

 

 

"Mortgage rates declined once again, as concerns about the slowing global economy and status of Brexit continued to drive investors' demand for U.S. Treasuries, ultimately pushing yields lower," said Joel Kan, Associate Vice President of Economic and Industry Forecasting. "Rates for most loan types were at their lowest levels in over a year, with the 30-year fixed mortgage rate falling to 4.55 percent - its lowest reading since last February. Although lower rates sparked a 3.5 percent increase in refinance applications, purchase activity was up only slightly last week and from a year ago."

Added Kan, "Entry-level housing supply remains weak and is likely hindering some would-be first-time buyers from finding a home. This - along with faster growth in the higher price tiers - is why the average loan application size has risen to a new high for three straight weeks."

Loans overall had an origination balance averaging $321,600 and purchase loans averaged $327,500. 

The FHA share of total applications was unchanged from 10.4 percent the previous week and the VA share increased to 10.6 percent from 10.2 percent. USDA applications accounted for 0.6 percent of the total.  

Interest rates moved lower for all loan types on both a contract and an effective basis. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with balances at or below the conforming limit of $484,350 dropped to 4.55 percent from 4.64 percent.  Points declined to 0.42 from 0.47. 

The contract rate for jumbo 30-year FRM, loans with origination balances higher than the conforming limit, decreased to 4.37 percent from 4.45 percent.  Points fell to 0.23 from 0.34.

Thirty-year FRM backed by the FHA had an average contract rate of 4.59 percent with 0.50 point.  The previous week the rate was 4.61 percent with 0.47 point.

The average contract interest rate for 15-year FRM dipped 5 basis point to 3.97 percent.  Points moved down from 0.44 to 0.40 point.  

The contract rate for 5/1 adjustable rate mortgages (ARMs) declined 10 basis points to an average of 3.99 percent.  Points moved from 0.26 to 0.29 point.  The share of applications that were for ARMs declined from 7.2 percent the prior week to 7.1 percent.

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential 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.