The volume of mortgage applications dipped 0.3% on a seasonally adjusted basis last week from the prior week, according to the Mortgage Bankers Association.
Refinancing applications decreased by 1%, although the level was 225% higher than the same week a year ago. The refinance share of mortgage activity slid to 75.4% of total applications from 76.2% the previous week, the MBA report said.
The MBA’s index measuring applications for home-purchase loans increased 2% from a week earlier. On an unadjusted basis, it was 3% higher than the previous week, but was 31% lower than the same week a year ago. It was the first time in six weeks that purchase activity was on the rise.
The MBA also reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $510,400 or less remained unchanged at 3.45%.
Joel Kan, MBA’s associate vice president of economic and industry forecasting, said California and Washington, “two states hit hard by COVID-19, saw another week of rising activity – partly driving the overall increase.”
The rest of the country’s mortgage activity was mostly on pause, he said.
“The pandemic-related economic stoppage has caused some buyers and sellers to delay their decisions until there are signs of a turnaround,” he said. “This has resulted in reduced buyer traffic, less inventory, and March existing-homes sales falling to their slowest annual pace in nearly a year.”
Among federal loan programs, the Federal Housing Administration’s share of total applications increased to 10.3% from 9.5% the week prior while the Department of Veterans Affairs’ share of total applications decreased to 13.8% from 14.3% and the Department of Agriculture’s share of total applications remained unchanged at 0.4%.