Mortgage application volume increased 7.1% during the week ended March 8, as the average rate for a 30-year, fixed-rate mortgage fell to 6.84%, down from 7.02% the previous week, according to the Mortgage Bankers Association.
Applications for refinances increased 12% compared with the previous week and were up 5% compared with the same week one year ago.
Applications for purchases increased 6% compared with the previous week and were up 11% compared with the same week one year ago.
“Mortgage rates dropped below 7 percent last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “Purchase application volume increased for the week but remains about 11 percent below last year’s level.
“By contrast, refinance volume picked up by 12 percent, with a larger, 24 percent increase in the government refinance index,” Fratantoni says. “While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of rates in the past two years.”
The refinance share of mortgage activity increased to 31.6% of total applications, up from 30.2% the previous week.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 7.7%.
Photo: Scott Graham