In the past month, total mortgage activity, as measured by the Mortgage Bankers Association’s (MBA) Market Composite Index, underwent a series of weekly declines, decreasing in the latest week by 6.3 percent. The latest week’s survey is for the week ending April 1. The latest week’s activity consisted of a 3.4 percent decrease in purchasing and a 9.9 percent decrease in refinancing.
The current month’s 30-year fixed-rate mortgage rates averaged 4.6 percent, compared to 3.1 percent in the previous month. The latest weekly rate of 4.9 percent was 10 basis points higher than the week before. This is the highest it has been in over three years. The MBA attributes financial markets’ expectations of tighter monetary policy in coming months as the cause of the weekly surges. The hot job market and wage growth continue to support housing demand despite much higher rates, although some demand-side measures are weakening. For example, the March NAHB/Wells Fargo HMI measure of future new home sales fell a notable 10 points.
Insufficient for-sale inventory continues to restrain purchase activity and elevated average loan sizes continue to price out first-time homebuyers.
On an unadjusted basis, the Purchasing Index showed a year-over-year decline of 9 percent, i.e., compared to the same week one year ago. For the same comparison period, the Refinancing Index showed a 62 percent decline.
The refinance share of mortgage activity decreased to 38.8 percent of total applications from 40.6 percent the previous week and from 51 percent one year ago. The adjustable-rate mortgage (ARM) share of activity increased to 6.8 percent of total applications. The FHA share of total applications decreased to 9.2 percent from 9.3 percent the week prior.