The number of new mortgage applications dropped slightly last week, though purchase applications increased and homeowners are taking advantage of low interest rates to refinance at a much higher rate than a year ago.
Mortgage applications overall fell 3.3 percent from a week earlier last week, according to the weekly survey released Wednesday by the Mortgage Bankers Association.
The MBA’s Refinance Index fell 7 percent from the previous week and was 218 percent higher than the same week one year ago. The unadjusted Purchase Index increased 13 percent over the previous week and was 20 percent lower than the same week one year ago.
“The news in this week’s release is that purchase applications, still recovering from a five-year low, increased 12 percent last week to the strongest level in almost a month. The ten largest states had increases in purchase activity, which is potentially a sign of the start of an upturn in the pandemic-delayed spring homebuying season, as coronavirus lockdown restrictions slowly ease in various markets,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
The refinance share of mortgage activity decreased to 71.6 percent of total applications from 75.4 percent the previous week. The adjustable-rate mortgage share of activity increased to 2.9 percent of total applications.
In coronavirus hotspots that MBA has been highlighting each week, California saw a 17.2 percent increase in home purchase applications over the previous week. Washington state increased by 16.1 percent and New York climbed 13.7 percent.
“California and Washington continued to show increases in purchase activity, with New York seeing a significant gain after declines in five of the last six weeks,” Kan said.