Throughout the start of 2013, results from the Mortgage Bankers Association's Weekly Mortgage Applications Surveys have varied despite widespread improvements to the national housing market and overall economy. After seeing a surge of applications in early March, the most recent survey revealed total application volume dropped 7.1 percent on a seasonally adjusted basis the week ending March 15.
According to the latest survey, the Market Composite Index dropped 7 percent on an unadjusted basis. Potential buyers historically hold off on making the investment when the inventory of homes for sale is low, but economists predict applications will rise when more current owners list their properties for sale in the busier months for real estate characteristic of spring and summer.
The Purchase Index, a measurement of applications that is buyer-specific, fell 4 percent from one week earlier when adjusted and dropped 3 percent when unadjusted. Despite the week-over-week decline, the index was 6 percent higher than seen this time last year. Annual improvements are often considered a better representation of overall status of the national housing market, especially since the downturn in the real estate industry seen over the last few years.
Another factor that saw a negative change from the previous week was the Refinance Index, which decreased 8 percent from the week before. Furthermore, the refinance share of application activity slipped to 75 percent from 76 percent. This represented the tenth consecutive week of declines, while March 15 marked the lowest level in mortgage records since May 2012.
For those applying to buy or refinance, fixed-rate mortgages have been a more popular option for type of mortgage desired, however the share of adjustable-rate mortgage applications remained steady at 5 percent, matching the level recorded the week before. In addition, the HARP share of refinance activity jumped to 31 percent, as more homeowners turn to federal programs for assistance.
Mortgage rates traditionally play a major role in application volumes, as buyers and those refinancing may be more likely to become active when affordability is available. While rates and home prices have steadily been on the rise in recent weeks, economists predict averages will stay below 4 percent, extending affordable buying and refinancing conditions. Those interested in homeownership can keep track of their local housing market or work with a real estate professional to ensure a quick and trustworthy transaction.