A slowing of refinance activity drove down the level of mortgage applications for the week ending March 28, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 1.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index dipped by an even 1% compared with the previous week.
Both the seasonally adjusted and unadjusted Purchase Index increased 2% from one week earlier – the latter was also 9% higher than the same week one year ago. However, the Refinance Index decreased 6% from the previous week – it was also 57% higher than the same week one year ago – and the refinance share of mortgage activity decreased to 38.6% of total applications from 40.4% the previous week.
Joel Kan, MBA’s vice president and deputy chief economist, “Overall purchase activity has shown year-over-year growth for more than two months as the inventory of existing homes for sale continues to increase, a positive development for the housing market despite the uncertain near-term outlook. Refinance applications were down almost 6% last week and remain very sensitive to rate movements, as most borrowers have mortgages with lower rates.”
Among the federal programs, the FHA share of total applications decreased to 15.8% from 16.5% the week prior while the VA share of total applications decreased to 14.4% from 14.5% and the USDA share of total applications decreased to 0.5% from 0.6%.
Separately, data released earlier this week from the US Census Bureau and the Department of Housing and Urban Development determined sales of new single-family houses in February were at a seasonally adjusted annual rate of 676,000, which is 1.8% above the revised January rate of 664,000 and is 5.1% above the February 2024 estimate of 643,000.
The median sales price of new houses sold in February was $414,500, which is 3% below the January price of $427,400 and 1.5% below the February 2024 price of $420,900. The average sales price of new houses sold in February was $487,100m which is 4.1% below the January price of $507,900 and 4.4% below the February 2024 price of $509,700.
The seasonally adjusted estimate of new houses for sale at the end of February was 500,000, a slight 0.8% uptick from the January estimate of 496,000 and a 7.5% surge from the February 2024 estimate of 465,000. The seasonally adjusted estimate of the number of month’s supply at the current sales rate at the end of February 8.9 months, down 1.1% from the January estimate of 9.0 months but 2.3% above the February 2024 estimate of 8.7 months.
