A slowing in refinance activity drove down mortgage application activity for the week ending March 21, according to data from Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 2% on both a seasonally adjusted and unadjusted basis from one week earlier. The seasonally adjusted Purchase Index increased 1% from one week earlier and the unadjusted index was also higher by 1% – the latter was also 7% higher than the same week one year ago. The adjustable-rate mortgage (ARM) share of activity decreased to 6.3% of total applications.
However, the Refinance Index decreased 5% from the previous week, although it was 63% higher than the same week one year ago, and the refinance share of mortgage activity decreased to 40.4% of total applications from 42% the previous week.
Among the federal programs, the FHA share of total applications remained unchanged at 16.5% from the week prior while the VA share of total applications decreased to 14.5% from 14.6% and the USDA share of total applications increased to 0.6% from 0.4% the week prior.
“Purchase applications saw the strongest weekly pace in almost two months and were 7% higher than a year ago,” said Joel Kan, MBA’s vice president and deputy chief economist. “Last week’s purchase activity was driven primarily by a 6% increase in FHA applications, as the combination of loosening housing inventory and slowly declining mortgage rates have presented this segment of buyers with more opportunities. Additionally, VA purchase applications saw a modest increase over the week. Overall applications declined, however, as refinance applications were down 5% to its lowest level in a month.”
