The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 2.3% in the group’s seasonally adjusted composite index for the week ending March 8. Mortgage interest rates decreased on three of five types of loans the MBA tracks.
On an unadjusted basis, the MBA’s composite index rose by 3% in the past week. The seasonally adjusted purchase index increased by 4% compared with the week ended March 1. The unadjusted purchase index rose by 6% for the week and was 2% higher year over year.
Mortgage loan rates for a top-tier 30-year fixed-rate loan dropped from 4.57% to 4.45% last week, according to Mortgage News Daily. As of Tuesday night, top-tier borrowers were paying 4.14% for that loan, a 14-month low. The yield on a 10-year U.S. Treasury note tumbled in the last week from 2.72% to 2.6% as of last night’s close. A year ago the 10-year note yielded 2.87%.
Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting said:
Led by a 5.5 percent increase in FHA loan applications, purchase activity picked up last week and was almost 2 percent higher than a year ago. Purchase applications have now increased year-over-year for four weeks, which signals healthy demand entering the busy spring buying season. However, the pick-up in the average loan size continues, with the average balance reaching another record high. With more inventory in their price range compared to first-time buyers, move-up and higher-end buyers continue to have strong success finding a home.
The MBA’s refinance index decreased by 0.2% week over week, and the percentage of all new applications that were seeking refinancing dropped from 40% to 38.6%.
Adjustable rate mortgage loans accounted for 7.2% of all applications, down 0.2 percentage points compared with the prior week.
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.67% to 4.64%. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.41% to 4.45%. The average interest rate for a 15-year fixed-rate mortgage dipped from 4.08% to 4.02%.
The contract interest rate for a 5/1 adjustable rate mortgage loan ticked up from 4.08% to 4.09%. Rates on a 30-year FHA-backed fixed-rate loan decreased from 4.66% to 4.61%.