Mortgage app volume drops as interest rates decline

The volume of mortgage applications dropped during the week ending March 30 amid declines in a number of interest rates, according to the Weekly Mortgage Applications Survey released by the Mortgage Bankers Association.

The Market Composite Index, a measure of mortgage loan application volume, slid 3.3% on a seasonally adjusted basis and dropped 3% on an unadjusted basis. The Refinance Index slipped 5% from the previous period. The Purchase Index fell 2% on seasonally adjusted and unadjusted bases. Compared to the same week in 2017, the unadjusted Purchase Index was higher by 5%.

During the period, refinances accounted for 38.5% of total applications, their lowest level since September 2008. The refinance share declined from the previous 39.4%. The activity share of adjustable-rate mortgages (ARM) also slid to 6.5%.

FHA applications made up 10.1% of overall activity, an increase from its previous 9.9% share. The VA share was steady at 10.3%, and the USDA share of total applications remained unchanged at 0.8%.

Most average contract interest rates declined during the period, while others remained unchanged.

The average rate for the 30-year fixed-rate mortgage with conforming loan balances was unchanged at 4.69%, with points also steady at 0.43 for 80% loan-to-value ratio loans. Rates for 30-year fixed-rate mortgages with jumbo loan balances averaged 4.56%, down from 4.6%, with points decreasing to 0.27 from 0.36.

The average for 30-year fixed-rate mortgages backed by the FHA dropped to 4.74% from 4.75%, with points decreasing to 0.54 from 0.56. Rates for the 15-year fixed-rate mortgage were unchanged at 4.09%, with points decreasing to 0.42 from 0.46. The average rate for 5/1 ARMs slid to 3.87% from 3.92%, with points decreasing to 0.28 from 0.46.