Mortgage application activity slowed during the week ending March 27 amid a steep decline in refinancing, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, fell by 10.4% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was down by 10%.
The Refinance Index tumbled 17% from the previous week, although it was 33% higher than the same week one year ago, and the refinance share of mortgage activity decreased to 45.3% of total applications from 49.6% the previous week.
In comparison, the seasonally adjusted Purchase Index decreased 3% and the unadjusted index dipped by 2% compared with the previous week – the latter was 1% higher than the same week one year ago.
Among the federal programs, the FHA share of total applications decreased to 19.5% from 19.7% the week prior while the VA share of total applications increased to 16.1% from 15.9% and the USDA share of total applications remained unchanged at 0.5%.
Mike Fratantoni, MBA’s senior vice president and chief economist, observed. “The headwinds of higher rates are being offset somewhat by the buyer’s market in many parts of the country – there are more homes for sale than buyers have seen in some time. Moreover, purchase applications for FHA and VA loans continue to hold up better than those for conventional buyers. However, the shocks of the jump in rates and the increase in overall economic uncertainty are likely having an impact on buyer confidence.”
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