Mortgage Applications Increase as Rates Drop for First Time in 3 Months
For the week ending March 4, 2022, mortgage applications increased 8.5% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
“Mortgage rates dropped for the first time in 12 weeks, as the war in Ukraine spurred an investor flight to quality, which pushed U.S. Treasury yields lower,” Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said in a press release. “A 6-basis-point decline in the 30-year fixed-rate mortgage led to a slight rebound in total refinance activity, with a larger gain in government refinances. Looking ahead, the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates as these effects work against each other.”
In addition, the Refinance Index increased 9% from the previous week and was 50 percent lower than the same week one year ago, while the Purchase Index increased 9% from one week earlier, the MBA said in the release.
The MBA added that the refinance share of mortgage activity decreased to 49.5% of total applications from 49.9% the previous week, while the adjustable-rate mortgage (ARM) share of activity decreased to 5.2% of total applications.
“Purchase activity also increased, as prospective buyers acted on lower rates and the early start of the spring buying season. The average loan size remained close to record highs, with higher-balance loan applications continuing to dominate growth,” Kan added in the release.