Refinances bounced up last week due to a brief drop in interest rates, the Mortgage Bankers Association’s (MBA) weekly survey found.
Overall, mortgage loan application volume rose 8.5% last week, reversing a weeks-long downward trend. This is likely the result of spring inventory trickling into the market, though the lower rates may have played a role.
The adjusted purchase index rose 9%, while the unadjusted purchase index rose 11% and was 7% lower YOY.
The refinance index jumped 9% and was down 50% YOY. Refinances made up 49.5% of total applications, a slight dip as overall volume increased. Government refinances made big gains in particular.
“Mortgage rates dropped for the first time in 12 weeks, as the war in Ukraine spurred an investor flight to quality, which pushed U.S. Treasury yields lower,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“Looking ahead, the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates as these effects work against each other. Purchase activity also increased, as prospective buyers acted on lower rates and the early start of the spring buying season. The average loan size remained close to record highs, with higher-balance loan applications continuing to dominate growth.”
A record 8% of U.S. homes (6 million) are now worth $1 million or more, nearly double the pre-pandemic share of 4.8% (3.5 million).
The FHA share of total applications rose from 8.6% to 8.7%. The VA share of total applications rose from 10.2% to 10.4%, while the USDA share of total applications increased from 0.4% to 0.5%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell from 4.15% to 4.09%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances fell from 3.88% to 3.79%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell from 4.15% to 4.12%.