Mortgage Applications Rise as Rates Fall
A weekly survey released this morning by the Mortgage Bankers Association (MBA) reported that mortgage applications increased 4.5 percent on a seasonally-adjusted basis last week compared to one week earlier. On an unadjusted basis, the Index increased 5 percent from the previous week. The Refinance Index also rose 6 percent from the prior week.
“Although total purchase application volume fell last week, there was a significant divergence between the conventional and government markets,” said Mike Fratantoni, MBA’s Vice President of Research and Economics.
The increase in mortgage activity has been mirrored by a decrease in mortgage rates. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.68 percent, the lowest rate since January 2013, from 3.76 percent.
Last week’s numbers were almost the complete opposite from where they stood at the end of March, as rates fell and applications increased.
Fratantoni offered the following explanation:
“Following the April 1 increase in FHA mortgage insurance premiums, government purchase applications fell by almost 14 percent, to their lowest level since February 2013. On the other hand, applications for conventional purchase loans increased by more than 5 percent, bringing the conventional purchase index to its highest level since October 2009 and the highest level since the expiration of the home buyer tax credit. With these changes, the government share of all purchase loans fell to 30 percent, the lowest level since we began tracking this series in 2011.”