Mortgage application activity decreased during the week ending March 2, even as a number of reports indicated that employment conditions improved across the country.
According to the Mortgage Bankers Association's Weekly Application Survey, application activity fell 1.2 percent on a seasonally adjusted basis, as fewer current borrowers capitalized on affordable rates to refinance their home loans.
Mortgage records found that while home purchase applications rose 2.1 percent, refinancing dipped 2 percent, accounting for a 77 percent share of all application activity. The previous week, refinances made up a 77.9 percent share. This decline in refis was able to offset gains recorded in other areas, leading to the overall drop in activity.
Meanwhile, the industry group noted that the rate of a 30-year fixed-rate mortgage with a conforming loan balance of $417,500 or less edged lower during the week to 4.06 percent. In addition, the average rate for a 30-year FRM jumbo loan fell slightly to 4.33 percent from 4.34 percent the prior week.
This decrease in mortgage application activity comes amid reports of gains in the nation's job market. According to a report from Automatic Data Processing, the private sector added roughly 216,000 new jobs in February. This increase in job prospects could give financial safety and soundness to more Americans hoping to make the transitions into homeownership.
"There is nothing in this report to change our estimate that private non-farm payrolls increased by a slightly bigger than consensus 240,000," said Automatic Data Processing chief economist Paul Ashworth, according to HousingWire "Allowing for another decline in public sector employment, we believe that total non-farm payrolls increased by 220,000. Labor market conditions are clearly improving, although the latest data on incomes and expenditure are not quite as upbeat."
The number of added jobs in the private sector was surprising to a number of industry analysts after a survey from Econoday anticipated job growth of only 203,000 in the private sector after a range of estimates between 190,000 and 260,000.
In order to make significant improvement in the national unemployment rate, TrimTabs director of macroeconomic research Madeline Schnapp noted that the economy need to start generating at least 250,000 new employment positions every month throughout the course of 2012. She said the recent additions were promising, but the economy still has a long way to go.