Mortgage Apps: Purchases Fall, Refis Jump Amid Shutdowns

Bottom Line: Mortgage activity rose as mortgage rates fell below 3.5% again and refinancing applications jumped. Purchase applications fell as shutdowns for the novel coronavirus have largely halted buyer and seller traffic in many markets. Applications are not closed loans, so we don't yet have a read on how well loans are being processed amid social distancing and working from home. Looking into the state-level details for purchases we see a sharp drop in California and Washington last week, but a small increase in Washington, suggesting activity has at least stopped falling in the Seattle area, one that was hit hard and early by the virus. Overall, these data suggest borrowers are still able to submit applications for refinancing and are especially eager to do so when mortgage rates drop below 3.5%. The data also suggest that purchase activity has turned sharply lower, but for now is at least not falling as much as some areas of the economy. While not yet adopted in the most hard-hit areas like the New York Tri-state area, the latest shelter-in-place edicts in the San Francisco Bay Area exempt realtors as "essential". The MBA Mortgage Applications Index ROSE by 15.3% during the week ended March 27 to 874.6, sharply above its 13 week average of 742.0 and 73.7% ABOVE its year-ago level. The Purchase Index FELL by 10.8% to 211.7, sharply below its 13 week average of 271.9 and 23.5% BELOW its year-ago level. The Refinance Index ROSE by 25.5% to 4,781. Despite this increase, refinancing activity is sharply above its 13 week average of 3,486 and 167.7% ABOVE its year-ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 35 bps to 3.47% and the 15-year fixed rate declining by 23 bps to 3.05%.