Purchase mortgage demand reversed two weeks of declines as applications jumped last week, according to the latest figures from the Mortgage Bankers Association (MBA).
The MBA’s Market Composite Index, a measure of mortgage loan application volume, increased 7.9% on a seasonally adjusted basis over the week ending April 17, boosted by easing mortgage rates and higher inventory levels than last year in most of the U.S.
The seasonally adjusted purchase component index gained 10% over the week, while the unadjusted purchase index was 12% higher over the week and 14% higher than a year ago. The refinance index rose 6% over the week to land 52% higher than a year ago.
“Mortgage rates declined last week as financial markets responded positively to the Middle East ceasefire and the lower trend in oil prices,” noted Mike Fratantoni, deputy chief economist of the MBA, in a statement accompanying Wednesday’s data release.
Beyond more inventory options and slightly lower borrowing costs, Fratantoni said “a still resilient job market” is also supporting housing demand.
Headline jobs numbers for March showed resilient albeit concentrated hiring gains, lowering the unemployment rate to 4.3% from 4.4% in February. Economists warn, though, that March survey data would likely not reflect labor impacts from the ongoing Iran war.
MBA data shows average mortgage rates for 30-year fixed-rate loans steadily eased to 6.35% over the survey period, down from 6.42%, 6.51% and 6.57% over the preceding weeks. Elevated purchase activity pushed the refinance share of total mortgage applications to 44.2% from 45.5% the previous week.
Across government channels, the share of applications for loans insured by the Federal Housing Administration (FHA) was unchanged at 18.2%, while the portion of applications for loans backed by the Department of Veterans Affairs declined to 15% from 15.7% a week earlier.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.1% from 6.14% and 6.22% over the two prior weeks.
