Mortgage Apps: Activity Jumps As Rates Revive Refis

Bottom Line: Mortgage rates fell further in the final week of March, spurring a sharp increase in refinancing. Refinancing activity had been extremely muted but increased in March as both 30-year and 14--year fixed-rates fell. 5-year Adjustable Rate Mortgages (5-year fixed then flowing with 30-year amortization schedule) plunged 20+bps in the final week of the month, driving ARMs to 9.5% of all applications after accounting for 7-7.5% of all applications for years. Purchase activity, which led the rebound in application activity early this year, continued to climb higher and is approaching cycle highs again. Overall there has been a clear shift in activity since rates started to fall late last year. Applications have been leading indicator of stabilization in housing activity -- and this report suggests the potential for renewed acceleration. The MBA Mortgage Applications Index ROSE by 18.6% during the week ended March 29 to 503.6, sharply above its 13 week average of 394.1 and 29.8% ABOVE its year ago level. The Purchase Index ROSE by 3.4% to 276.6, moderately above its 13 week average of 255.5 and 9.6% ABOVE its year ago level. The Refinance Index ROSE by 38.5% to 1,786. Despite this increase, refinancing activity is sharply above its 13 week average of 1,160 and 58.0% ABOVE its year ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 9 bps to 4.36% and with the 15-year fixed rate declining by 9 bps to 3.78%.