Busier months for real estate activity are just around the corner, with the likely addition of more homes listed for sale and more buyers ready to move. In the past, real estate records have shown a significant jump in mortgage applications in March, April and May, but the most recent Primary Mortgage Market Survey from the Mortgage Bankers Association revealed application activity dropped the week ending March 8.
According to the survey, application activity fell 4.7 percent on a seasonally adjusted basis from the week before, and were down 4 percent when measure on an unadjusted basis. While refinancing has been exceptionally popular for those who already have a mortgage, the Refinance Index dropped 5 percent from the previous week. In addition, the share of applications received from those looking to refinance their initial mortgage slipped to 76 percent, but still account for a large portion of activity. However, this is highlighted as the lowest level since May last year.
Despite the affordable buying opportunity extended by low mortgage rates, the Purchase Index decreased 3 percent from one week earlier when measured on a seasonally adjusted basis and was down 1 percent when not adjusted. Though the PI declined on a week-over-week basis, it was 9 percent higher than seen this time a year ago.
"The announcement of stronger than anticipated job growth last week led to an increase in interest rates, with the 30 year fixed mortgage rate in our survey reaching the highest level in more than six months," said Mike Fratantoni, vice president of research and design for MBA. "Refinance applications declined as a result, but remain high given the steady flow of HARP applications."
ARMs account for more applications
In recent months, buyers and those refinancing their initial mortgage have been opting for fixed rate mortgages, however, MBA reported the adjustable-rate mortgage share of activity grew to account for 5 percent of all applications seen the first week of March.
For the most part, mortgage rates have been relatively low, remaining unchanged throughout much of February, according to mortgage records from Freddie Mac. Data from the government-sponsored enterprise revealed that for the week ending March 7, average rates 30-year FRMs reached 3.52 percent, while the average rate for 5-year ARMs hit 2.63 percent.