The average purchase loan size hit its highest mark since 2022, even as home lenders
The MBA's Market Composite Index, a measure of weekly application volume based on surveys of the trade group's members, inched down a seasonally adjusted 0.6% for the seven days ending March 29. Activity dropped for the third week in a row, following a similar 0.7% decrease in the previous survey. Compared to a year ago, the index landed 10.2% lower.
"Mortgage rates moved lower last week, but that did little to ignite overall mortgage application activity," said Joel Kan, MBA vice president and deputy chief economist, in a press release.
The 30-year fixed rate average edged down by 2 basis points to 6.91% from 6.93% the previous week for loans with balances below the conforming limit of $766,550 in most markets. Points used to help buy down the rate also decreased to 0.59 from 0.6 for 80% loan-to-value ratio applications.
"Elevated mortgage rates continued to weigh down on home buying," leaving purchase application levels little changed despite higher volumes of some government-market loans, Kan added. The seasonally adjusted Purchase Index was down 0.1% week over week, but 12.6% lower on an annual basis. Still, in a sign of how limited inventory is managing to affect home prices even amid muted activity, the average purchase-loan size hit its highest mark since April 2022, coming in at $453,000.
Purchase loan sizes among MBA lenders have trended higher since late January,
Monthly
Current interest rates "added fuel to the fire lit by surging home prices during the pandemic, creating a reality where in many places, wealthy Americans are the only ones who can afford to buy homes," said Chen Zhao, Redfin economic research lead, in a press release.
Meanwhile, the MBA's Refinance Index took a 1.6% fall from the previous survey. Compared to the same seven-day period in 2023, volumes also decreased 5%. Refinances also shrank to 30.3% of overall activity from 30.8%.
Despite the uptick in Federal Housing Administration-backed purchase activity, the portion of federally sponsored loan applications contracted from one week earlier. FHA-guaranteed loans overall accounted for 11.7% of activity, falling from 12%. Applications coming through the Department of Veterans Affairs managed to grow its share to 12.1% from 12%, though, and the small slice of applications from the U.S. Department of Agriculture remained at 0.5% week over week.
Alongside the conforming rate, other fixed averages tracked by the MBA also fell last week, with the 30-year jumbo coming in at 7.06% compared to 7.14% seven days earlier. Borrowers used 0.57 worth of points, up from 0.38, for 80% LTV-ratio loans.
The 30-year FHA-backed contract rate averaged 6.74%, sliding down by a single basis point from 6.75% from the previous survey. Points came in at 0.9, decreasing from 0.97.
The mean 15-year contract average declined 11 basis points to 6.35% from 6.46% week over week. Points to buy down the rate fell to 0.56 from 0.75.
The 5/1 ARM, which begins with a fixed rate before adjusting to market levels after 60 months, was the only average reported by the MBA to rise last week. The rate rose 10 basis points to 6.37% from 6.27%. Points increased to 0.68 from 0.64.
With the 30-year average hovering near its previous weekly level, the adjustable-rate mortgage share garnered the same 7% of volume as in the prior survey.
