The strong showing for both refinancing and purchase applications during the week ended March 23 didn't last, with both reversing course last week. The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage loan application volume, decreased 3.3 percent on a seasonally adjusted basis during the week ended March 30, and was down 3 percent on an unadjusted basis. While MBA did not make any holiday related adjustments to its data, both Passover and Good Friday were observed during the week and may have affected application volumes.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
The Refinance Index, which had rebounded by 7 percent a week earlier, fell back by 5 percent and the share of applications that were for refinancing declined from 39.4 percent to 38.5 percent. It was the smallest market share for refinancing since September 2008.
The Purchase Index was down by 2 percent on both a seasonally adjusted and an unadjusted basis. The unadjusted index was 5 percent higher than its level during the same week in 2017.
Applications for FHA mortgages accounted for 10.1 percent of the total, up from 9.9 percent a week earlier while the VA share was unchanged at 10.3 percent. The USDA share remained at 0.8 percent.
With few exceptions MBA reported a decline in both contract and effective interest rates. One outlier was the 30-year fixed-rate mortgage (FRM) with balances at or under the conforming loan limit of $453,100. The contract rate for that product was unchanged at 4.69 percent with 0.43 points. The effective rate was also unchanged.
The rate for jumbo 30-year FRM, loans with loan balances greater than $453,100, decreased to 4.56 percent from 4.60 percent. Points were also down, from 0.36 to 0.27 and the effective rate declined.
FHA-backed 30-year FRM had an average contract rate of 4.74 percent with 0.54 point. The previous week the rate was 4.75 percent with 0.56 point. The effective rate was also lower.
The rate for 15-year FRM was unchanged at 4.09 percent but points dipped to 0.42 from 0.46. The effective rate declined.
The average contract interest rate for 5/1 adjustable rate mortgages (ARM) fell 5 basis points to 3.87 percent and points decreased to 0.28 from 0.46. The effective rate decreased from last week. The share of applications that were for ARMs declined to 6.5 percent from 7.0 percent a week earlier.
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.