Mortgage applications and refinancing activity across the country soared at the end of March as mortgage rates continued to fall, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 29, 2019.
Mortgage applications increased 18.6 percent during the last week of March, the MBA’s Refinance Index increased 39 percent, and was at its highest level since November 2016.
The seasonally adjusted Purchase Index increased 3 percent and the unadjusted Purchase Index increased 4 percent, compared with the previous week and was 10 percent higher than the same week one year ago.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
“There was a tremendous surge in overall applications activity, as mortgage rates fell for the fourth week in a row, with rates for some loan types reaching their lowest levels since January 2018. Refinance borrowers with larger loan balances continue to benefit, as we saw another sizable increase in the average refinance loan size to $438,900 – a new survey record,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “We had expected factors such as the ongoing strong job market and favorable demographics to help lift purchase activity this year, and the further decline in rates is providing another tailwind. Purchase applications were almost 10 percent higher than a year ago.”
The average contract interest rate for 30-year, fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.36 percent from 4.45 percent the week before, while the average contract interest rate for 5/1 ARMs remained unchanged at 3.77 percent
The refinance share of mortgage activity increased to 47.4 percent of total applications at the end of March from 40.4 percent the prior week. The adjustable-rate mortgage share of activity increased to 9.5 percent of total applications.
The FHA’s share of total applications decreased to 8.8 percent from 9.3 percent the week prior. The share of VA mortgage applications remained unchanged from 10.4 percent the week prior. The share of USDA mortgage applications remained unchanged from 0.6 percent the week prior.