The number of mortgage applications filed in the U.S. jumped 4.8% for the week ending March 30 as more borrowers started the process of buying a home, according to an industry trade group.
The upswing is tied to an increase in applications for both home purchases and refinancings, according to the latest Mortgage Bankers Association market composite index.
"It’s too early to conclude that March’s increase in mortgage applications for home purchase is the start of an upward trend," Capital Economics said. "But the sharp rise in average loan size certainly seems consistent with an increasing appetite for mortgage credit."
The refinance index, which measures refinancing activity, grew 4% from the previous week while the seasonally adjusted purchase index increased 7.2% from a week earlier.
"Applications to buy a home picked up last week, and are running more than 2% above the level reported at this time last year. Home purchase applications for conventional loans are now about 10% above last year’s level," said Michael Fratantoni, the MBA’s vice president of research and economics. "Applications for government loans increased by more than 10% over the week, for both purchase and refinance, likely spurred by borrowers seeking to apply before scheduled increases in FHA mortgage insurance premiums at the beginning of April."
The refinance share of all mortgage activity remained relatively the same at 71.2%, compared to 71.9% a week earlier.
Mortgage interest rates for the most part fell during the most recent survey period. The average contract interest rate on a 30-year, fixed-rate mortgage with conforming loan balances declined from 4.23% to 4.16%. In addition, the 30-year, FRM for jumbo loans fell from 4.54% to 4.46%, while the 30-year, FRM backed by FHA declined from 3.96% to 3.89%.
The 15-year, FRM fell from 3.50% to 3.40%, and the interest rate for 5/1 ARMs declined from 3% to 2.93%.