The mortgage space saw the biggest one-week rate drop in a decade, and it affected refinances last week, the Mortgage Bankers Association revealed in its latest credit availability report.
MBA reported that recent declines in mortgage rates led to a spike in refinances for jumbo mortgages. Only Department of Veterans Affairs and Federal Housing Administration loans showed less refinance interest than during the prior week.
"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,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. "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."
Overall, March saw an increase in mortgage credit availability, according to the MBA’s Mortgage Credit Availability Index, which analyzes data from Ellie Mae. The MCAI climbed 1.1% to 182.1 last month.
The credit availability index for conventional loans rose 3.6%, but the Government MCAI dropped by 1.2%. In comparison, Jumbo MCAI declined by 5.2%.
“The credit supply for government loans decreased in March, as investors continue to reduce FHA and VA streamline refi offerings,” Kan said.