Mortgage applications saw a third straight decline in volume during the week ended March 24.   The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, was down 0.8 percent on a non-seasonally adjusted basis compared to the previous week, and 0.4 percent week unadjusted.

Applications for purchase mortgages increased during the week, but those gains were offset by further erosion in refinancing; the Refinance Index fell by 3 percent for the second consecutive week.  The seasonally adjusted Purchase Index rose 1 percent from the week ended March 17 and the unadjusted Index was up 2 percent.  The Purchase Index was 4 percent higher than during the same week in 2016.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

Refinancing also lost more market share, dropping back to its October 2008 level, 44 percent of total activity, compared to 45.1 percent the week before.  Applications for adjustable-rate mortgages (ARMs) had accounted for the largest share of business since October 2014, 9 percent, the week before, but fell back to 8.5 percent last week.  FHA received 10.8 percent of all loan applications, down from 10.9 percent, the VA share rose to 11.0 percent from 10.1 percent and USDA applications accounted for 1.0 percent, up from 0.9 percent.  

Interest rates fell 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 conforming loan balances ($424,100 or less) decreased to 4.33 percent from 4.46 percent.  Points increased to 0.43 from 0.41.

There was a 14-basis point drop, to 4.26 percent, in the contract rate for jumbo 30-year FRM (loan balances greater than $424,100).  Points decreased to 0.26 from 0.37.

The average contract interest rate for 30-year FRM backed by the FHA was 4.24 percent with 0.36 point.  The previous week the average rate was 4.33 percent with 0.40 point.

Fifteen-year FRM had an average rate of 3.57 percent, down from 3.68 percent.  Points rose to 0.43 from 0.37.

The most widely used ARM, the 5/1 hybrid, had a rate of 3.30 percent, down from 3.41 percent.  Points ticked up to 0.28 from 0.25.

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.  Interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.