Mortgage demand drops despite slightly lower rates

Mortgage demand receded for the third consecutive week despite slightly lower mortgage rates. Mortgage applications decreased by 0.6% on a seasonally adjusted basis during the week ending March 29, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey. 

“Mortgage rates moved lower last week, but that did little to ignite overall mortgage application activity,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Elevated mortgage rates continued to weigh down on home buying. Purchase applications were unchanged overall, although FHA purchases did pick up slightly over the week. Refinance applications decreased to fall 5% below last year’s pace.”

As of March 26, the 30-year fixed rate on HousingWire’s Mortgage Rates Center stood at 7.16%, up from 7.07% one week earlier. At the same time one year ago, the 30-year fixed rate averaged 6.53%. Meanwhile, the 15-year fixed rate averaged 6.51% on March 26, up from 6.5% one week earlier.

Both purchase and refinance activity decreased during the week. ​​Purchase loan application volume dropped by 1% from one week earlier. Meanwhile, refinance volume fell by 2% from the prior week.

The MBA survey shows that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) decreased to 6.91%, down from 6.93% last week. Meanwhile, rates on jumbo loans (balances greater than $766,550) decreased week over week to 7.06%, down from 7.14%. 

The Federal Housing Administration (FHA) share of total applications decreased to 11.7% last week, down from 12% the week before. The U.S. Department of Veterans Affairs (VA) share climbed to 12.1%, up from 12% the week before. And the U.S. Department of Agriculture (USDA) share remained unchanged at 0.5%.

The MBA survey, conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.