Mortgage applications reversed a six-week trend last week and rose 4.8 percent, with prospective homebuyers and refinancings driving the increase.
In addition, the refinance index, which measures refinancing activity, increased by 4 percent, and the purchase index rose 7.2 percent from the week before, according to the Mortgage Bankers Association (MBA), which compiles the data.
Michael Fratantoni, the MBA’s vice president of research and economics, highlighted the positive year-over-year increases to the mortgage data.
“Applications to buy a home picked up last week, and are running more than 2 percent above the level reported at this time last year. Home purchase applications for conventional loans are now about 10 percent above last year’s level,” Fratantoni said. “Applications for government loans increased by more than 10 percent over the week, for both purchase and refinance, likely spurred by borrowers seeking to apply before scheduled increases in FHA mortgage insurance premiums at the beginning of April.”
Starting April 1, the FHA increased mortgage premiums on its loans by 75 percent, a measure no doubt inspired by the agency’s shaky finances, which have inspired a number of policy changes in recent months. Given the increase in mortgage activity that the new rates inspired, it will be interesting to see how applications respond for the current week, now that the new rates have been officially implemented.
As HousingWire noted, refinancing comprised 71.2 percent of overall, down just 0.7 basis points from the week before, while mortgage rates uniformly fell. The 30-year FRM was down from 4.23 percent to 4.16 percent, the 30-year FRM for jumbo loans down from 4.54 to 4.46, FHA 30-year FRM down 3.96 to 3.89 and 15-year FRM were down from 3.50 to 3.40.