Mortgage application volume decreased 0.7% during the week ended March 22, despite a slight decrease in mortgage rates that brought the average rate for a 30-year to 6.93%, down from 6.97% the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances fell 2% compared with the previous week and were down 9% compared with than the same week one year ago.
Applications for purchases decreased 0.2% and were down 16% compared with the same week one year ago.
“Mortgage application activity was muted last week despite slightly lower mortgage rates,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The 30-year fixed rate edged lower to 6.93 percent, but that was not enough to stimulate borrower demand.”
“Purchase applications were essentially unchanged, as homebuyers continue to hold out for lower mortgage rates and for more listings to hit the market,” Kan says. “Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually, as we forecast that rates will move toward 6 percent by the end of the year. Similarly, with rates remaining elevated, there is very little incentive right now for rate/term refinances.”
The refinance share of mortgage activity decreased to 30.8% of total applications, down from 31.2% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 7.0% of total applications.
Photo: Walter Randlehoff