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Purchase application volume increased, both week-to-week and year-over-year, as high-end buyers as well as those that need government loans entered the market, according to the Mortgage Bankers Association.
The MBA’s Weekly Mortgage Applications Survey for the week ending March 8 found total activity increased 2.3% from one week earlier as the seasonally adjusted purchase index increased 4% during the period.
The unadjusted purchase index increased 6% compared with the previous week and was 2% higher than the same week one year ago.
“Led by a 5.5% increase in FHA loan applications, purchase activity picked up last week and was almost 2% higher than a year ago,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a press release.
“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 refinance index decreased 0.2% from the previous week. The refinance share of mortgage activity decreased to 38.6% of total applications from 40% the previous week.
Adjustable-rate loan activity decreased to 7.2% from 7.4% of total applications, while the share of Federal Housing Administration-insured loans increased to 10.4% from 10.3% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 10.2% from 10.4% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.6% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased 3 basis points to 4.64%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate increased 4 basis points to 4.45%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 5 basis points to 4.61%. For 15-year fixed-rate mortgages, the average decreased 6 basis points to 4.02%. The average contract interest rate for 5/1 ARMs increased 1 basis point to 4.09%.