Higher Rates Drive Refis Down

Amid higher interest rates, mortgage applications dipped slightly last week, according to a report released Wednesday by the Mortgage Bankers Association.

MBA’s weekly mortgage applications survey found that applications overall decreased 1.3 percent for the week ending March 5. Refinance applications decreased 5 percent from the previous week and were 43 percent lower than the same week one year ago, while purchase applications increased 9 percent for the week and were 2 percent higher than a year ago.

The refinance share of mortgage activity decreased to 64.5 percent of total applications from 67.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.0 percent of total applications.

“The run-up in mortgage rates continues to cool demand for refinance applications. Activity declined last week for the fourth time in five weeks,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “With the spring buying season at the doorstep, the purchase market had its strongest showing in four weeks, with gains in both conventional and government applications.”