Mortgage application volume jumped 8.6% on a seasonally adjusted basis last week on lower rates and surging spring home sales, the Mortgage Bankers Association’s (MBA) Weekly Applications Survey shows.
For the week ended April 16, applications for refinances increased 10% compared with the previous week while applications for purchases increased 6%.
Year-over-year, applications for refinances were down 23% but applications for purchases were up 57%.
The average rate for a 30-year fixed-rate mortgage with conforming loan balance was 3.20%, down from 3.27%.
“Mortgage rates dropped to their lowest levels in around two months, prompting a small resurgence in refinance activity after six weeks of declines,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Borrowers acted on the decrease in rates for most loan types, with both conventional and government refinance applications showing gains.
“The spring housing market also saw a boost from lower rates, with purchase applications – driven by a jump in conventional applications – increasing over five percent,” Kan says. “[The] MBA expects the purchase market to remain strong, with the recovering job market and supportive demographics fueling housing demand in the months ahead.
“The average loan size for purchase applications increased after a few weeks of declines, as fewer homes available for sale make for a competitive buying market that is accelerating home-price growth,” he adds.
The refinance share of mortgage activity increased to 60.0% of total applications, up from 59.2% the previous week.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 3.6% of total applications.