The jump in applications can be traced to mortgage rates falling to the lowest level in two months, prompting a small resurgence in refinance activity, said Joel Kan, MBA associate vice president of economic and industry forecasting.
“Borrowers acted on the decrease in rates for most loan types, with both conventional and government refinance applications showing gains,” Kan. “The spring housing market also saw a boost from lower rates, with purchase applications — driven by a jump in conventional applications — increasing over 5%.”
Kan added the MBA expects the purchase market to remain strong due to the recovering job market, vaccination rollout and supportive demographics, which will combine to fuel housing demand in the months ahead.
The refinance index also increased, up 10% from the previous week. The seasonally adjusted purchase index also increased 6% from one week earlier. The unadjusted purchase index increased 7 % compared with the previous week — and was 57% higher than the same week one year ago.
The refinance share of mortgage activity increased to 60% of total applications from 59.2% the previous week.
The FHA share of total mortgage applications increased to 11.3% from 10.8% from the week prior. However, the VA share of total applications decreased to 11.5% from 12.1% the week prior.
Here is a more detailed breakdown of this week’s mortgage application data:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.2% from 3.27%
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.34% from 3.35%
- The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.15% from 3.24%
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.65% from 2.67%
- The average contract interest rate for 5/1 ARMs increased to 2.67% from 2.6%