Mortgage application volume increased an impressive 18.6% on an adjusted basis during the week ended March 29, as the average rate for a 30-year fixed-rate mortgage fell to 4.36%, down dramatically from 4.45% the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased 39% from the previous week while applications for purchases increased 3%.
On an unadjusted basis, total volume increased 18% compared with the previous week. Applications for purchases increased 4% compared with the previous week and were 10% higher compared with the same week one year earlier.
“There was a tremendous surge in overall applications activity, as mortgage rates fell for the fourth week in a row – with rates for some loan types reaching their lowest levels since January 2018,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Refinance borrowers with larger loan balances continue to benefit, as we saw another sizeable increase in the average refinance loan size to $438,900 – a new survey record.”
Lower mortgage rates, a strong job market and rising wages have all helped give the spring home buying season a solid start this year.
“We had expected factors such as the ongoing strong job market and favorable demographics to help lift purchase activity this year, and the further decline in rates is providing another tailwind Purchase applications were almost 10 percent higher than a year ago,” Kan says. “The average loan size for purchase loans declined slightly, as applications for smaller purchase loan sizes exceeded that of higher loan sizes – a positive sign that first-time buyers were increasingly active in the market.”
The refinance share of mortgage activity increased to 47.4% of total applications, up from 40.4% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 9.5% of total applications.
The average rate for 5/1 ARM, based on contract signings, remained unchanged at 3.77%.