Last week saw stronger purchase demand and an increase in mortgage applications, despite market volatility pushing mortgage rates higher.
The Mortgage Bankers Association said in its latest weekly research report that mortgage applications rose last week on stronger purchase demand, even as market volatility drove up mortgage rates.
The MBA Market Composite Index, which tracks mortgage applications, rose 3.2% from the previous week, while the Purchase Index rose 7.8%. The unadjusted purchasing index rose 11% compared to the same week last year.
As financial markets reacted to geopolitical turmoil and broader economic uncertainty, the average interest rate on conforming 30-year fixed-rate mortgages rose from 6.09% to 6.19%, and jumbo loans rose from 6.16% to 6.26%, according to MBA researchers.
The share of refinances in mortgage transactions fell to 57.8% of total applications from 59.8% the previous week, while the share of adjustable rate mortgages rose to 8.9%. Meanwhile, FHA’s share of applications increased from 15.8% to 17.1%, VA’s share decreased from 17.1% to 16.1%, and USDA’s share remained unchanged at 0.4%.
Mike Fratantoni
“Financial markets were volatile last week as turmoil continued in the Middle East,” MBA Senior Vice President and Chief Economist Mike Fratantoni said in a report. “Mortgage rates rose substantially over the week, but refinance volumes remained roughly flat.”
The increase followed a strong week in mortgage demand in late February, when applications surged as borrowers took advantage of 30-year mortgage rates that briefly fell below 6%, according to MBA’s previous weekly report.
Optimal Blue’s mortgage rate data showed a similar movement in borrowing costs across the market.
The average 30-year conforming mortgage rate was 6.06% as of March 10, according to Optimal Blue’s Mortgage Rate Index, which tracks rate locking data from lenders, which is slightly lower than the MBA survey for the same period. Because it reflects actual loan prices rather than survey responses, the index provides a detailed look at how mortgage rates are trending across the market and often provides a real-time snapshot of borrowing costs available to homebuyers.
Despite interest rates rising in recent days, strong housing inventory in some markets has kept purchase demand above last year’s pace.
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