It’s a somewhat rare event when mortgage application volume increases significantly even though rates increased, as well – but that’s exactly what happened last week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
Stranger still, perhaps, is that applications for refinances increased as mortgage rates jumped.
However, there are certain circumstances that can cause this to happen: For example, sometimes mortgage borrowers who were previously holdouts on refinancing suddenly realize that rates will be rising in the long term and, thus, make a “last-minute” decision to refinance. It can also be due to a last-minute marketing push on the part of lenders to target these holdouts and get them to refinance – perhaps by making them overtly aware that the Fed is likely about to raise rates.
It could also just be spring fever.
According to the survey, total application volume increased 3.3% on an adjusted basis during the week ended March 3 compared with the previous week.
Applications for refinances increased 5%, while applications for purchases increased 2%. The survey covers about 75% of the mortgage market.
On an unadjusted basis, total volume increased 16% compared with the previous week. Applications for purchases increased 15% on an unadjusted basis and increased 4% compared with the same week one year earlier.
The refinance share of mortgage activity increased to 45.4% of total applications – up from 45.1% the previous week.
According to the MBA’s data, the average rate for a 30-year, fixed-rate mortgage (FRM) during the week ended March 3 was 4.36%, up from 4.30%.
The average rate for a 30-year jumbo FRM was 4.27%, up from 4.23%.
The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 4.18%, up from 4.07%.
The average rate for a 15-year FRM was 3.57%, up from 3.51%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.48%, up from 3.35%.
The ARM share of activity increased to 7.7% of total applications – the highest level since October 2014.
The average loan size for purchase applications reached a survey high at $313,300.
Looking at the government loans, applications for mortgages backed by the FHA represented about 11.8% of all applications – down from 12.3% the week prior. The Veterans Affairs share was 11.6%, down from 11.7%, while the U.S. Department of Agriculture share remained unchanged at 0.9%.