Mortgage application volume jumped 15.1% during the week ended February 21, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased 26% compared with the previous week while applications for purchases decreased 3%.
The results include an adjustment for the Presidents’ Day holiday.
On an unadjusted basis, total volume increased 29% compared with the previous week.
Applications for purchases were up 10% compared with the same week one year ago while applications for refinances were up 224% compared with a year earlier.
Driving the increase in applications for refinances was low mortgage rates: The average rate for a 30-year fixed-rate mortgage was 3.57%, down from 3.73% the previous week.
“The 30-year fixed rate mortgage dropped to its lowest level in more than seven years last week, amidst increasing concerns regarding the economic impact from the spread of the coronavirus, as well as the tremendous financial market volatility,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “Refinance demand jumped as a result, with conventional refinance applications increasing more than 30 percent. Given the further drop in Treasury rates this week, we expect refinance activity will increase even more until fears subside and rates stabilize.”
“We are now at the start of the spring homebuying season,” Fratantoni adds. “While purchase applications were down a bit for the week, they are still up about 10 percent from a year ago. The next few weeks are key in whether these low mortgage rates bring in more buyers, or if economic uncertainty causes some home shoppers to temporarily delay their search.”
The refinance share of mortgage activity increased to 66.2% of total applications, up from 60.8% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 6.4% of total applications.