Mortgage application volume decreased 1.3% during the week ended March 5, due mainly to rates rising to the highest level since July, which, in turn, took a bite out of refinance volume, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances decreased 5% compared with the previous month while applications for purchases increased 7%.
Year-over-year, applications for refinances were up 43% while applications for purchases were up 2%.
On an unadjusted basis, total volume decreased 1% compared with the previous week.
“The 30-year fixed mortgage rate climbed to 3.26 percent last week, which is the highest since last July and up 40 basis points since the start of 2021,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Signs of faster economic growth, an improving job market and increased vaccine distribution are pushing rates higher. The run-up in mortgage rates continues to cool demand for refinance applications. Activity declined last week for the fourth time in five weeks.
“With the spring buying season at the doorstep, the purchase market had its strongest showing in four weeks, with gains in both conventional and government applications,” Kan adds. “Overall activity was 2.4 percent higher than a year ago, and loan sizes moderated for the second straight week – potentially a sign that more first-time buyers are entering the market.”
The refinance share of mortgage activity decreased to 64.5% of total applications, down from 67.5% percent the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 3.0% of total applications.
Photo: Tierra Mallorca
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