As mortgage applications increase, mortgage rates have begun to drop, according to data from the Mortgage Bankers Association [1] (MBA) and Freddie Mac [2]. The MBA’s Market Composite Index, a measure of mortgage loan application volume, rose 1.5 percent from a week earlier, while the 30-year fixed-rate mortgage dropped from 4.10 to 4.08 percent. The average loan size for purchase applications was at $318,700, a survey high.
The declining 30-year fixed-rate mortgage is at a 2017 low, according to Freddie Mac, but still higher than this time last year. During this week a year ago, the 30-year fixed-rate mortgage average 3.58 percent. Still, mortgage rates are declining, and may keep declining as applications increase.
Freddie Mac reports that mortgage rates are declining week-over-week, a trend that has continued over several weeks. Though early March saw a week-over-week jump, rates have declined since then, especially 30-year fixed-rate mortgages.
Other mortgages, such as 15-year fixed-rate mortgages, have seen week-over-week declines as well, though not as drastic. The average rate for a 15-year fixed-rate mortgage dropped from 3.36 percent to 3.34 percent week-over-week.
Additionally, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.28 percent from 4.34 percent, with points increasing to 0.38 from 0.31 for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.
As rates decline, refinances have declined with them. The refinance share of mortgage activity saw a decrease to 41.6 percent of total applications from the previous weeks 42.6 percent, according to the MBA. This is the lowest level since September 2008.
While 15-year and 30-year fixed rate mortgage application volume has declined, the MBA reports that adjustable-rate mortgages remained unchanged.
Read more about the MBA's survey here [3], and Freddie Mac's data here [4].