Mortgage Applications Surge, Signaling Start of Promising Home Buying Season

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Mortgage applications increased 8.9% on an adjusted basis during the week ended March 22, as the average rate for a 30-year fixed-rate mortgage fell significantly to 4.45%, down from 4.55% the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.

Applications for refinances increased 12% while applications for purchases increased 6%.

On an unadjusted basis, total volume increased 9% compared with the previous week. Applications for purchases increased 7% on an unadjusted basis and were 4% higher compared with the same week one year earlier.

“The spring buying season is off to a strong start,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Thanks to an unexpectedly large drop in mortgage rates following last week’s FOMC meeting, purchase applications jumped six percent and refinance applications surged over 12 percent.

“Rates dropped across all loan types, and the 30-year fixed-rate mortgage is now more than 70 basis points below last November’s peak,” Kan adds. “The average loan size increased once again to new highs for both purchase and refinance loans, as borrowers with – or seeking – larger loans tend to be more reactive to the drop in rates.”

The refinance share of mortgage activity increased to 40.4% of total applications, up from 39.2% the previous week.

The adjustable-rate mortgage (ARM) share of activity increased to 7.8% of total applications.

The average rate for a 5/1 ARM, based on closings, was 3.77%, down from 3.99%.

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