Mortgage applications dropped for the third week straight despite a spike in purchase applications, the latest report from the Mortgage Bankers Association said.

According the Weekly Mortgage Applications Survey for the week ending March 11, mortgage applications fell 3.3% from one week earlier.

The rise in the purchase index was not enough to offset the continuous drop in refinance activity. 

While the seasonally adjusted purchase index increased 0.3% to its highest level since January 2016, the refinance index decreased 6% from the previous week.

Furthermore, the refinance share of mortgage activity decline to its lowest level since August 2015, making up only 55% of total applications, down from 56.7% the previous week. The adjustable-rate mortgage share of activity decreased to 4.9% of total applications.

The Federal Housing Administration share of total applications dipped to 11.7% from 12% the week prior, as the Veteran Affairs share of total applications dropped from 12.6% last week to 12.3%. The United State Department of Agriculture share of total applications remained unchanged from 0.8% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) inched higher to 3.94%, up from 3.89%.

Similarly, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.86% from 3.81%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA moved up to 3.77%, compared to 3.71%.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.22% from 3.14%, while the average contract interest rate for 5/1 ARMs increased to 3.23% from 3.2%.

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