Purchase applications helped buoy an otherwise depressed week of borrower activity in the face of growing interest rates.
The Mortgage Bankers Association’s Market Composite Index — a measure of loan application volume — fell 2.2% from the week before on a seasonally adjusted basis, with the refinance segment dropping 4% week-over-week and 39% year-over-year.
It marks the lowest point for the refi index since September 2020. The refi share of application activity also fell weekly to 62.9% from 64.5%. However, the purchase application index grew in contrast, climbing 2% on a seasonally adjusted basis over last week. Unadjusted, purchases rose 3% from the previous week and by 5% annually.
The average for the 30-year fixed rate mortgage increased to its highest level since June 2020, having surged 36 basis points from the beginning of February.
“The run-up in rates continues to reduce incentives for potential refinance borrowers,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a press release. “The purchase market helped offset the slump in refinances, as the recovering job market and demographic factors drive demand, despite ongoing supply and affordability constraints.”
The adjustable-rate mortgage share of activity dipped to 2.7% from 3% the week before. By product type, Federal Housing Administration mortgages made up 11.7% of this week’s applications, up slightly from 11.6% week-over-week, with Veterans Affairs loans decreasing to 10.3% from 11.1% while the U.S. Department of Agriculture/Rural Housing Service share remained at 0.4%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances — $548,250 or less — rose to 3.28% from 3.26%.
The average contract interest rate for jumbo loans — those over $548,250 in value — held at 3.34%. The average contract interest rate for the 30-year FHA-insured mortgage jumped to 3.25% from 3.2%.
The average contract interest rate for 15-year FRMs increased to 2.67% from 2.63% and the average contract interest rate for 5/1 ARMs spiked to 2.82% from 2.69%, with points falling to 0.3 from 0.37.
