Mortgage activity dipped last week, despite four straight weeks of declines among 30-year fixed rates.
The seasonally adjusted purchase index declined 4 percent from the previous period in the week ending on March 31, according to the Mortgage Bankers Association’s weekly survey. The unadjusted purchase index dropped 3 percent week-to-week, and 53 percent from the previous year, in the first drop in four weeks.
Refinancing activity also dropped to a three-week low, with the index down 5 percent from the previous period and 59 percent from the previous year.
The drop in activity came even as mortgage rates dipped slightly. The average contract 30-year fixed-rate mortgage with conforming loan balances ($726,200 or less) fell from 6.45 percent to 6.4 percent.
An interesting nugget from the report is the diverging paths taken by mortgage rates with conforming loan balances and jumbo loans, which don’t tend to move in opposite directions. Last week, the average contract 30-year fixed-rate jumbo loan mortgage increased from 6.27 percent to 6.36 percent.
Jumbo loans are often reserved for homes on the higher end of the market — an increase in rates could signal a changing pattern for lenders affected by rising interest rates or fearful of more bank collapses.
“While we have seen relative weakness at the high end of the housing market in recent months, the divergence in rates suggests that banks may be tightening credit in response to recent challenges, preserving balance sheet capacity as deposit balances have declined,” MBA chief economist Mike Fratantoni said in a statement.
The VA share of total mortgage applications decreased to 11 percent from 11.6 percent, while the USDA’s share increased from 0.5 percent to 0.6 percent week-to-week. The FHA’s share also decreased, to 12 percent from 12.3 percent.
The average contract interest rate for a 15-year, fixed-rate mortgage increased to 5.97 percent.
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