MBA: Falling mortgage rates propel mortgage applications

Mortgage applications rose once again for the week ending on March 22 2019, according to the newest data from the Mortgage Bankers Association's weekly Mortgage Applications Survey.

On an unadjusted basis, the Market Composite Index climbed 8.9% from the previous week.

MBA Vice President of Economic and Industry Forecasting Joel Kan said the spring buying season is off to a strong start.

“Thanks to an unexpectedly large drop in mortgage rates following last week’s FOMC meeting, purchase applications jumped 6% and refinance applications surged over 12%,” Kan continued. “Rates dropped across all loan types, and the 30-year fixed-rate mortgage is now more than 70 basis points below last November’s peak.”

Furthermore, Kan notes that the average loan size increased to new highs for both purchase and refinance loans, as borrowers with – or seeking – larger loans tend to be more reactive to the drop in rates.

The Refinance Index slightly grew a whopping 12% from the previous week and the unadjusted Purchase Index increased 7% from a week ago and is also 4% higher than the same week in 2018. Lastly, the seasonally adjusted Purchase Index moved forward 6% from the week before.

Here's a more detailed breakdown of this week's mortgage application data:

• The refinance share of mortgage activity increased to 40.4% of total applications, inching forward from 39.2% the previous week.
• The adjustable-rate mortgage share of activity rose to 7.8% of total applications.
• The Federal Housing Administration's share of mortgage apps fell to 9.3% from last week’s 10.4%.
• The Veterans Affairs' share of applications slid from 10.6% the previous week to 10.2% this week.
• The Department of Agriculture's share of total applications held its ground from last week’s 0.6%.
• Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell from 4.55% to 4.45%.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350)  slightly decreased from last week’s 4.37% to 4.35%.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA moderately fell from last week’s 4.59% to 4.48% this week.
• The average contract interest rate for 15-year fixed-rate mortgages declined from 3.97% to 3.87%.
• The average contract interest rate for 5/1 ARMs fell to 3.87% from 3.97%.