Total mortgage applications dropped 4% for the week ending March 29 even as home purchase demand edged higher, the Mortgage Bankers Association reported.
The industry trade group noted the purchase index grew 1% from the previous week.
loanDepot’s Chief Economist Jim Svinth, explained, "The uptick in purchase applications was driven by the significant increase in government loan applications; that spike can likely be attributed to increased consumer confidence and improving home values."
"Purchase demand is growing regardless of lower housing inventory, creating fierce competition among the most sought after properties. I expect purchases to continue to heat up along with the weather as we move into the spring home buying season," said Bob Walters, Quicken Loans chief economist.
Meanwhile, Svinth said, "While refinance applications decreased week over week, interest rates are still historically low, which provides a lot of opportunities for borrowers."