MBA Survey: Rates Increase Slightly, Mortgage Applications Decline

Bottom Line: Mortgage activity fell slightly in the latest week. Mortgage rates were up slightly on the week but were still around the October lows when 30 year conforming balance mortgage rates hovered below 4.00%. Home buying increased modestly while refinancing activity declined for the 7th time in the last 13 weeks. On a trend basis mortgage applications are still improving, especially when looking at 13-week averages for this volatile series. But the slowdown in the recent weeks leaves concern that even the slight increase in mortgage rates seen so far may be enough to stall gains. The MBA Mortgage Applications Index FELL by 1.0% during the week ended March 25 to 460.5, slightly below its 13 week average of 466.6 but 0.8% ABOVE its year ago level. On a longer term basis, mortgage applications rose from early 2011 until May 2013 when the trend topped out and began a steady retreat. However, the declining trend bottomed in December 2014, turned sharply higher in early 2015 but then the trend shifted lower and is now up again. The Purchase Index ROSE by 2.1% to 228.6, modestly above its 13 week average of 222.1 and 21.0% ABOVE its year ago level. The level of purchase activity had stayed quite low, amid moderate volatility, since May 2010 but is now turning moderately higher. The Refinance Index FELL by 3.3% to 1,785. With this decline, refinancing activity is modestly below its 13 week average of 1,874 and 11.2% BELOW its year ago level. Contract Mortgage Rates ROSE with the 30-year fixed rate increasing by 1 bp to 3.94% and with the 15-year fixed rate increasing by 1 bp to 3.19%.