Mortgage Applications Turn Higher, Rates Fall Too

The seasonally adjusted purchase index jumped by 15% from the previous report. On an unadjusted basis, the composite index rose by 15% week-over-week. The unadjusted purchase index is rose 18% for the week and is up 17% year-over-year.

The share of refinancings was unchanged last week at 77%, the lowest level since last July.

The average contract interest rate for a conforming 30-year fixed-rate mortgage fell from 3.77% to 3.70%. The rate for a jumbo 30-year fixed-rate mortgage decreased from 3.93% to 3.80%. The average interest rate for a 15-year fixed-rate mortgage fell from 3.03% to 2.96%.

The contract interest rate for a 5/1 adjustable rate mortgage remained fell from 2.65% to 2.55%.

The sharp jump in applications in the past week was either a cause of or the result of a concomitant drop in mortgage rates, which have been rising slightly for the past few weeks. More likely is that rates came down and applications went up.

The spring selling season traditionally gets underway in March, and one thing to be aware of now is the inventory of homes for sale, which is very low. That will have the effect of lifting home prices and may have an impact as well on both mortgage applications and rates.