As we move further into this year’s buyer’s market, mortgage applications jumped 8.9 percent from one week earlier, according to recent data from the March 22 Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. MBA’s Market Composite Index increased 8.9 percent on a seasonally adjusted basis week over week, and 9 percent unadjusted.
Meanwhile, refinance volume increased 12 percent from the previous week, and the seasonally adjusted Purchase Index increased 6 percent week over week.
"The spring buying season is off to a strong start. Thanks to an unexpectedly large drop in mortgage rates following last week's FOMC meeting, purchase applications jumped 6 percent and refinance applications surged over 12 percent," said Joel Kan, MBA's AVP of Economic and Industry Forecasting. "Rates dropped across all loan types, and the 30-year fixed-rate mortgage is now more than 70 basis points below last November's peak. The average loan size increased once again to new highs for both purchase and refinance loans, as borrowers with - or seeking - larger loans tend to be more reactive to the drop in rates."
According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.45 percent from 4.55 percent, with points decreasing to 0.39 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
RE/MAX data indicates that the housing market shifted into a homebuyer’s market in February, and MBA’s data indicates buyers are taking advantage, and the market is starting to see some balance.
“Trends of five months or more often indicate significant shifts, and the year-over-year trends in declining sales and rising inventory have both reached that length now,” said RE/MAX CEO Adam Contos. “It’s interesting to see the slowing sales and growing inventories that benefit buyers and at the same time the record prices that benefit sellers. The big picture supports an ongoing return to more balanced conditions.”