Mortgage Applications Increase for Third Week

Mortgage applications increased for the third-straight week, up 3.0% from last week’s 6.5% increase, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending March 17, 2023.

This week’s numbers:

• The Market Composite Index, a measure of mortgage loan application volume, increased 3.0% on a seasonally adjusted basis from one week earlier.  
• On an unadjusted basis, the Index increased 3% compared with the previous week. 
• The Refinance Index increased 5% from the previous week and was 68% lower than the same week one year ago. 
• The seasonally adjusted Purchase Index increased 2% from one week earlier. 
• The unadjusted Purchase Index increased 3% compared with the previous week and was 36% lower than the same week one year ago.
• The refinance share of mortgage activity increased to 28.6% of total applications from 28.2% the previous week. 
• The adjustable-rate mortgage (ARM) share of activity increased to 8.6% of total applications.
• The FHA share of total applications decreased to 12.3% from 12.9% the week prior. 
• The VA share of total applications decreased to 11.7% from 11.9% the week prior. 
• The USDA share of total applications remained unchanged at 0.5% from the week prior.
• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.48% from 6.71%, with points decreasing to 0.66 from 0.79 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200)decreased to 6.30% from 6.39%, with points decreasing to 0.55 from 0.61 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.32% from 6.58%, with points decreasing to 1.07 from 1.20 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.02% from 6.14%, with points decreasing to 0.60 from 0.77 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 5/1 ARMs decreased to 5.58% from 5.69%, with points decreasing to 0.75 from 0.87 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

MBA’s take:

“Treasury yields declined last week, driven by uncertainty over the health of the banking sector and worries about the broader impact on the economy. Mortgage rates declined for the second week in a row, with the 30-year fixed rate dropping to 6.48%, the lowest level in a month,” said Joel Kan, MBA’s vice president and deputy chief economist. “However, mortgage rates have not dropped as much as Treasury rates due to increased MBS market volatility. The spread between the 30-year fixed and 10-year Treasury remained wide at around 300 basis points, compared to a more typical spread of 180 basis points.”

Added Kan, “Both purchase and refinance applications increased for the third week in a row as borrowers took the opportunity to act, even though overall application volume remains at relatively low levels.”