Mortgage applications slipped 4% for the week ending March 29 as refinancing activity dropped, an industry trade group said.

Home purchase demand, on the other hand, continued to edge higher, the Mortgage Bankers Association said.

The refinance index dropped 6% after growing 8% last week. Meanwhile, the purchase index continued to escalate, increasing 1%.

“Total purchase applications increased last week, due to an almost 7% increase in purchase applications for government loans. This was likely driven by borrowers applying for loans prior to the scheduled increase in FHA premiums that took effect on April 1,” said Mike Fratantoni, MBA’s vice president of research and economics.

He continued saying, “On a year-over-year basis, purchase applications are up about 4%, in line with the trend we are seeing in home sales volumes.”

Even with declining refinancings, Capital Economics analysts saw room for optimism. “While the refinancing book is coming off the boil, we’re optimistic that mortgage applications for home purchases are in the early stages of a sustainable comeback.”

The refinance share of overall mortgage activity inched down to 74%.

The adjustable-rate mortgage share of activity remained at 5% of total applications.

Meanwhile, the average 30-year, fixed-rate mortgage with a conforming loan balance fell to 3.76% from 3.79%.

The average 30-year, FRM with a jumbo loan balance dropped to 3.85%, compared to 3.90% last week.

The average contract interest rate for the 30-year, FRM backed by the FHA also sank to 3.48%.

Additionally, the 15-year, FRM dropped to 2.99%, and the 5/1 ARM escalated to 2.60% from 2.58%. 

 bswanson@housingwire.com

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