Stock market and Treasury yield volatility continued last week and so did the downward trend of mortgage rates, which opened up more opportunities for refinancing, but mortgage applicants did not take advantage of theses savings, according to the latest survey from the Mortgage Bankers Association (MBA).
Freddie Mac's Primary Mortgage Market Survey (PMMS) showed that mortgage rates deceased "amid ongoing market volatility" and troubled Treasury yields. The report showed that the 30-year fixed mortgage rate is at its lowest point since April 30, 2015 when it averaged 3.68 percent.
"Market volatility—and the associated flight to quality—continued unabated this week," said Sean Becketti, Chief Economist, Freddie Mac. "The yield on the 10-year Treasury dropped another 15 basis points, and the 30-year mortgage rate fell 7 basis points as well, to 3.72 percent. Both the Treasury yield and the mortgage rate now are in the neighborhood of early-2015 lows."
For the week ending March 4, 2016, mortgage applications increased 0.2 percent from one week earlier, the MBA reported. The Refinance Index decreased 2 percent to from last week. The seasonally adjusted Purchase Index increased 4 percent to the highest level since January 2016. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 30 percent higher than the same week one year ago.
The MBA reported that the refinance share of mortgage activity decreased to 56.7 percent of total applications from 58.6 percent the previous week. Meanwhile, the adjustable-rate mortgage (ARM) share of activity decreased to 5.2 percent of total applications.
The FHA share of total applications remained unchanged at 12.0 percent, the VA share of total applications increased to 12.6 percent from 12.1 percent, and the USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior, the report showed.