Lower mortgage rates are clearly still having a positive impact on mortgage demand as total demand jumped 2.9% for the week ending March 24th, according to the weekly survey from the Mortgage Bankers Association.
- The Purchase Index was up 2% from one week earlier but remains 35% lower than the same week one year ago.
- The Refinance Index jumped 5% from one week earlier but remains 61% lower than the same week one year ago.
Breaking It Down. The refinance share of mortgage activity increased to 29.1% of total applications while the adjustable-rate mortgage share of activity decreased to 7.7% of total applications.
Rates. The 30-year fixed-rate average contract interest rate fell to 6.48%, down 3 basis points from last week and down 31 basis points in three weeks. Rates are now down 168 basis points when compared to one year ago. This is the first time since rates skyrocketed last year that the year-over-year spread fell under 200 bips.
- The average contract interest rate for 15-year fixed-rate mortgages fell to 5.84%
Analysis. Joel Kan, economist at MBA, said slowing home price growth (and falling home prices in some areas) are helping to incentivize buyers as rates remain elevated. “Home-price growth has slowed markedly in many parts of the country, which has helped to improve buyers’ purchasing power. Purchase applications remain over 30 percent behind last year’s pace, but recent increases, along with data from other sources showing an uptick in home sales, is a welcome development.”