Despite volatility in interest rates, mortgage applications moved decidedly higher last week, continuing their strong stride into spring.
Total volume increased 4.6 percent sequentially, on a seasonally adjusted basis for the week ending March 27th, according to the Mortgage Bankers Association (MBA).
"This week's mortgage application survey falls right into line with recent indications that home sales – new, existing and pending – are on the rise, as is consumer sentiment," said Lynn Fisher, MBA's Vice President of research and economics."
Mortgage applications to purchase a home rose 6 percent week to week and were 8 percent higher than one year ago. Applications to refinance, which are more dependent on interest rate levels, rose 4 percent for the week and are 44 percent higher than they were one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.89 percent from 3.90 percent, with points decreasing to 0.36 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans, according to the MBA survey.
Both conventional and government loans moved higher, showing that more first-time buyers may be getting into the market. Government-insured FHA loans, as well as Veterans Administration loans, tend to be the product of choice for these buyers, and their volume grew by 19 percent from a year ago.
Mortgage rates edged lower this week, after a bounce higher in the middle of last week.
"3.75 percent remains the most prevalently-quoted conventional 30-year fixed rate for top tier scenarios. Most of the lenders that moved up to 3.875 percent with last week's spike are now back down to 3.75 percent, and a few of the most aggressive lenders are offering 3.625 percent," wrote Matthew Graham of Mortgage News Daily.
With both the month-end and quarter-end falling this week, and traders readying for the monthly employment report Friday, rates are not moving much. More volatility will likely be ahead.