On an unadjusted basis, the index decreased 4% compared with the previous week. The refinance index continued its declining streak and decreased 4% from the previous week, but was 45% higher than the same week one year ago.
Joel Kan, MBA’s vice president and deputy chief economist, noted that “the 30-year fixed rate decreas[ed] to 6.88%, the lowest rate since mid-December.” The rate was down from last week’s 6.93%.
The seasonally adjusted purchase index remained unchanged from the week prior, but, on an unadjusted basis, the purchase index decreased 5% compared with the previous week and was 3% higher than the same week one year ago.
“Treasury yields moved lower on softer consumer spending data as consumers are feeling somewhat less upbeat about the economy and job market,” said Kan. “Applications were about 1% lower for the week, which included the President’s Day holiday, as purchase applications stayed flat from a week ago while refinance applications saw a small decline. Purchase applications were up 3% from the same week last year. Increasing for-sale inventory in some markets has provided prospective buyers more options as we approach the spring homebuying season.”
Kan shared that while overall refinance application activity was “fairly weak,” FHA refinances jumped 8% over the week. “Compared to last year, overall refinance applications were up 45%,” he said.
The refinance share of mortgage activity increased to 38.9% of total applications from 38.7% the previous week. The adjustable-rate mortgage (ARM) share of activity, however, remained unchanged at 5.4% of total applications.
By product, the FHA share of total applications increased to 17.4% from 16.6% the week prior. The VA share of total applications decreased to 13.4% from 14.2% during the same period, while the USDA share of total applications decreased to 0.5% from 0.6%.
In addition to the 30-year fixed rate’s decrease, all other mortgage types saw decreases too. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances decreased to 7.00% from 7.03%. Meanwhile, the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.57% from 6.70%.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.25% from 6.31% while the average contract interest rate for 5/1 ARMs decreased to 6.05% from 6.08%.
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