A jump in mortgage rates led to mortgage application volume falling 8.5% during the week ended April 11, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances dropped 12% compared with the previous week but were up 68% compared with the same week one year ago.
Applications for purchases fell 5% compared with the previous week but were up 13% compared with the same week one year ago.
The drop in applications was due to a substantial jump in rates: The average rate for a 30-year, fixed-rate mortgage was 6.81% for the week ended April 11, up 20 basis points from 6.61% the previous week.
“Mortgage rates moved 20 basis points higher last week, abruptly slowing the pace of mortgage application activity with refinance volume dropping 12 percent and purchase volume falling 5 percent for the week,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “Purchase volume remains almost 13 percent above last year’s level, but economic uncertainty and the volatility in rates is likely to make at least some prospective buyers more hesitant to move forward with a purchase.”
“One notable change last week was the full percentage point increase in the ARM share,” Fratantoni adds. “Given the jump in rates, more borrowers are opting for the lower initial rates that come with an ARM, with initial fixed rates closer to 6 percent in our survey last week. The ARM share at 9.6 percent was the highest since November 2023, and this reflects the share of units. On a dollar basis, almost a quarter of the application volume last week was for ARMs, as borrowers with larger loans are even more likely to opt for an ARM.”
The refinance share of mortgage activity decreased to 41.3% of total applications, down from 43.6% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 9.6% of total applications.
Photo: Declan Sun