Mortgage app volume drops as interest rates decline

The share of refinance applications dropped to its lowest level since September 2008

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.

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