The recent precipitous drop in interest rates drove a sizable increase in mortgage applications for the week ending on March 29, 2019, according to the newest data from the Mortgage Bankers Association's weekly Mortgage Applications Survey.
On an unadjusted basis, the Market Composite Index climbed a whopping 18.6% from the previous week.
MBA Vice President of Economic and Industry Forecasting Joel Kan said there was a tremendous surge in overall applications activity, as mortgage rates fell for the fourth week in a row – with rates for some loan types reaching their lowest levels since January 2018.
“Refinance borrowers with larger loan balances continue to benefit, as we saw another sizeable increase in the average refinance loan size to $438,900 – a new survey record,” Kan continued. “We had expected factors such as the ongoing strong job market and favorable demographics to help lift purchase activity this year, and the further decline in rates is providing another tailwind. Purchase applications were almost 10% higher than a year ago.”
Furthermore, Kan said the average loan size for purchase loans declined slightly, as applications for smaller purchase loan sizes exceeded that of higher loan sizes – a positive sign that first-time buyers were increasingly active in the market.
The Refinance Index slightly grew an incredible 39% from the previous week and the unadjusted Purchase Index moved forward 4% from a week ago and is also 10% higher than the same week in 2018. Lastly, the seasonally adjusted Purchase Index increased 3% from the week before.
Here's a more detailed breakdown of this week's mortgage application data:
- The refinance share of mortgage activity increased to 47.4% of total applications, rising from 40.4% the previous week.
- The adjustable-rate mortgage share of activity rose to 9.5% of total applications.
- The Federal Housing Administration's share of mortgage apps retreated to 8.8% from last week’s 9.3%.
- The Veterans Affairs' share of applications held steady from 10.4% the previous week.
- The Department of Agriculture's share of total applications did not budge from last week’s 0.6%.
- Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell from 4.45% to 4.36%.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased from last week’s 4.35% to 4.21%.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA moderately decreased from last week’s 4.48% to 4.41% this week.
- The average contract interest rate for 15-year fixed-rate mortgages fell from 3.87% to 3.77%.
- The average contract interest rate for 5/1 ARMs held its ground at 3.77%.