Once again a decline in refinancing wiped out modest gains in purchase mortgage activity during the week ended March 23.  As a result the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey decreased 2.7 percent on a seasonally adjusted basis from the previous week.   On an unadjusted basis the index was down 2.6 percent.

The Refinance Index decreased by 4.6 percent, the sixth consecutive week it has lost ground.  It is now at its lowest level since December.  The decline was due primarily to a 12.0 percent drop in applications for government-backed refinancing sector.  The conventional refinancing sector by comparison fell only 3.4 percent.  The refinancing share of all mortgage applications activity dropped to 71.9 percent from 73.4 percent.  This was the lowest share of activity for refinancing since last July.   

The seasonally adjusted Purchase Index increased 3.3 percent from the week ended March 16 and the unadjusted Purchase Index was 1.0 percent higher than during the same week in 2011.

The four week moving average for the Market Index fell 3.40 percent and this average for the Refinance Index was down 4.94 percent.  The moving average for the seasonally adjusted Purchase Index rose 2.14 percent.

Interest rates increased across the board as did the effective rate of all products putting most rates at their highest level since late 2011.   The 30-year fixed-rate mortgage (FRM) with a conforming balance of $417,500 or less increased to 4.23 percent from 4.19 percent.  Points decreased to 0.45 percent from 0.47 percent.  The average rate for a 30-year jumbo FRM, those with balances over $417,500, increased to 4.54 percent with 0.46 point from 4.49 percent with 0.38 point. 

FHA-backed 30-year FRM rates were up 3 basis points to 3.96 percent and points increased to 0.52 from 0.48.   Fifteen-year FRM rates averaged 3.50 percent with 0.42 point compared to 3.47 percent with 0.40 point the previous week.

Interest rates for 5/1 adjustable rate mortgages (ARMs) jumped to 3.0 percent with 0.42 percent from 2.90 percent with 0.44 point.  ARM applications represented 5.4 percent of all mortgage applications during the week, down from 5.6 percent a week earlier.

Interest rate quotes are for a loan with an 80 percent loan-to-value ratio.  Points include the origination fee.

 During the month of February, the investor share of applications for home purchase was at 6.1 percent, a decrease from 6.4 percent in January.  This change was led by a decrease in the New England region.  In addition, the share of purchase mortgages for second homes decreased to 5.8 percent in February from 5.9 percent in January.

MBA's weekly survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.