The Fed’s decision on interest rates last week which led to lower mortgage rates has prompted a jump in applications.
The Mortgage Bankers Association says that mortgage applications increased 8.9% week-over-week on a seasonally-adjusted basis and 9% unadjusted.
MBA’s Weekly Mortgage Applications Survey revealed a 12% week-over-week increase in its Refinance Index; while the Purchase Index was up 6% adjusted and 7% unadjusted (4% higher year-over-year).
"The spring buying season is off to a strong start,” said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Rates dropped across all loan types, and the 30-year fixed-rate mortgage is now more than 70 basis points below last November's peak. The average loan size increased once again to new highs for both purchase and refinance loans, as borrowers with - or seeking - larger loans tend to be more reactive to the drop in rates."
There was an increase in the refinance share of all applications – from 39.2% to 40.4% - while the share of ARMs increased to 7.8% of all loan applications.
The FHA share of total applications decreased to 9.3% from 10.4% a week earlier; the VA share decreased to 10.4% from 10.6%; and the USDA share remained unchanged at 0.6%.
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