Mortgage application volume increased 0.5% on an adjusted basis during the week ended February 26, with applications for refinances increasing a mere 0.1% on higher rates and applications for purchases rising a seasonally uncharacteristic 2%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
On an unadjusted basis, total volume increased 2% compared with the previous week.
Year-over-year, applications for refinances increased 7% while applications for purchases increased 5%.
“Mortgage rates jumped last week on market expectations of stronger economic growth and higher inflation,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “The 30-year fixed rate experienced its largest single-week increase in almost a year, reaching 3.23 percent – the highest since July 2020.
“The overall share of refinances declined for the fourth consecutive week, and conventional refinance applications fell more than two percent to the lowest level in four months,” Kan says. “Government refinance applications historically lag the more rate-sensitive movements of conventional applications, and that was true last week, as both FHA and VA refinancing volumes increased.
“The housing market is entering the busy spring buying season with strong demand,” Kan adds. “Purchase applications increased, with a rise in government applications – likely first-time buyers – pulling down the average loan size for the first time in six weeks.”
The refinance share of mortgage activity decreased to 67.5% of total applications, down from 68.5% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 2.9% of total applications.
The average rate for a 30-year fixed-rate mortgage, based on closings, was 3.23%, up from 3.08% the previous week.
Photo: Tierra Mallorca