Raw mortgage application activity for the week ending March 20 rose a seasonally adjusted 32.2 percent from the previous week, according to a survey released Wednesday by the Mortgage Bankers Association. The four-week moving average for the application index increased 13.9 percent, showing a continued seasonal gain. The index for refinance applications rose a staggering 41.5 percent from the week before, bringing the refi share of total mortgage application activity to 78.5 percent, up from 72.9 percent the previous week. The index measuring application activity for home purchases rose 4.2 percent the same week, suggesting that interest in home purchases still is not keeping pace with the boom in refi popularity. “Mortgage rates fell sharply to low levels not seen in six decades following the Federal Reserve’s announcement on the Treasury [Department] bond and mortgage-backed securities purchase programs,” said Orawin Velz, MBA’s associate vice president of economic forecasting. “The drop offered a sizable refinance incentive for most homeowners sparking a pickup in refinance activity.” The Federal Open Market Committee released an official statement on March 18 announcing it would fund an additional $1.15 trillion to credit-unlocking efforts. “To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion,” Fed officials said in the statement. The FOMC also agreed to purchase up to $300 billion in Treasury securities during the next six months. It would appear, from the MBA’s data, that the announcement effectively pushed mortgage rates a bit lower, sparking borrower interest. The MBA, which also gathers data on mortgage interest rates, reported the lowest 30-year fixed mortgage rate — 4.63 percent — in the survey’s almost 20-year history. A popular refinance product, 15-year fixed rate mortgages, also showed a decline in interest rate to 4.48 percent from 4.52 percent the week before. A separate survey, conducted by Mortgage Maxx LLC, found that household activity in the application market rose slightly — 1.8 percent — for the week ending March 20, while household activity in California alone fell 2.8 percent the same week. Taken with the MBA’s findings of spiked raw activity, the Mortgage Application Index — or MAX — suggests that a virtually unchanged number of household submitted significantly more applications than a week before. While it would seem these prospective borrowers have found a bit more hope that financing is available and have tried to access that financing by submitting more applications, the fact remains that few new prospective borrowers have entered the market this week. It’s a fact MAX publisher Paul Descloux is quick to point out in his weekly commentary on the index. “Despite the telegraphed intentions to pull fixed-rate mortgages towards 4.0 percent, debtors remain relatively unexcited to date,” he wrote. Visit www.mbaa.org and www.mortgagemaxx.us for further details. Write to Diana Golobay at [email protected].

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