The US Market Composite Index, which measures mortgage loan application volume, rose by 3.3 per cent on a seasonally adjusted basis compared to the prior week. On an unadjusted basis, this index increased by 4 per cent, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 12, 2024. Additionally, the Refinance Index inched up by 0.5 per cent from the previous week and showed an 11 per cent increase compared to the same week last year. Meanwhile, the seasonally adjusted Purchase Index saw a 5 per cent uptick from the previous week, with the unadjusted Purchase Index rising by 6 per cent compared to the previous week but dropping by 10 per cent from the same week last year. "Rates increased for the second consecutive week, driven by incoming data indicating that the economy remains strong and inflation is proving tougher to bring down. Mortgage rates increased across the board, with the 30-year fixed rate at 7.13 percent – reaching its highest level since December 2023," said Joel Kan. MBA's Vice President and Deputy Chief Economist. "Despite these higher rates, application activity picked up, possibly as some borrowers decided to act in case rates continue to rise. Purchase applications drove most of the increase, but remain at low levels of around 10 percent behind last year's pace. Refinance applications increased very slightly, driven by a 3 percent gain in conventional applications." Moreover, purchase applications primarily led this surge, though they still lagged around 10 per cent behind last year's pace, while refinance applications saw a marginal increase, particularly in conventional applications. The refinance share of mortgage activity decreased to 32.1 per cent from 33.3 per cent the previous week, while the adjustable-rate mortgage (ARM) share increased to 7.3 per cent of total applications. Among government-backed loans, the FHA share of total applications rose slightly to 12.3 per cent, while the VA share decreased to 12.4 per cent. The USDA share remained unchanged. Interest rates for various mortgage products experienced increases, with the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rising to 7.13 per cent. Rates for jumbo loans increased to 7.40 per cent, and FHA-backed mortgages rose to 6.90 per cent. Additionally, 15-year fixed-rate mortgages saw an increase to 6.64 percent, while 5/1 ARMs rose to 6.52 percent.
