Mortgage Applications Drop on Decline in Refinance Volume

Refinance mortgage applications were at a 31-week low, and gross mortgage applications volume took a double-digit dive last week compared to one week ago, according to the Mortgage Banker’s Association (MBA) week application index. The MBA market composite index decreased 11% on a seasonally adjusted basis for the week ending April 2, compared to the week prior. The refinance index decreased 16.9% from the previous week and the purchased index increased 0.2%. The share of applications for government-backed purchase mortgages increased for the third straight week to 49.9%. That’s the greatest share of applications since February 1990 and the third highest level in the history of the data, the MBA said. “Mortgage rates jumped last week as the Federal Reserve completed their purchases of mortgage-backed securities,” said Michael Fratantoni, MBA’s vice president of research and economics. Refinance mortgage applications accounted for 58.7% of total application volume, down from 63.2% in the previous week. That’s the lowest share of refinance loans since the week ending August 28, 2009. Adjustable-rate mortgages (ARMs) accounted for 6.2% of total volume, up from 5.2% last week. “Refinance application volume dropped as mortgage rates reached their highest level since August 2009. Purchase volume was essentially unchanged relative to the prior week going into the Easter weekend,” Fratantoni said. The MBA said the average interest rate for a 30-year fixed-rate mortgage (FRM) was 5.31% with a 0.64 origination point, up from 5.04% with a 1.07 origination point for mortgages with a loan to value (LTV) of 80%. It’s the highest average mortgage rate for this type of loan since the first week of August 2009, the MBA said. The average rate for a 15-year FRM with an LTV of 80% was 4.54% with a 0.92 origination point, up from 4.34% with a 0.98 origination point. The average rate for a one-year ARM with an LTV of 80% was 7.03% with a 0.29 origination point, up from 6.88% with a 0.31 origination point. Write to Austin Kilgore.

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