Are borrowers waiting out the Fed's rate cuts?
Mortgage applications were down 1.6% from a week earlier, according to the Mortgage Banker Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 15.
MBA’s Mortgage Composite Index, which measures mortgage loan application volume, fell 1.6% on a seasonally adjusted basis from the week prior. This translates to a smaller 1% on an unadjusted basis.
Meanwhile, the refinance index went down 3% from the previous week and was also 3% lower than the figures from the same week last year.
Additionally, the seasonally adjusted purchase index dropped 1% week-over-week and 14% year-over-year.
Joel Kan, MBA’s vice president and deputy chief economist, said the drop in mortgage applications could be attributed to concerns about “the timing and extent to which the Fed might be able to reduce the fed funds rates this year.”
Mortgage rates went up last week, Kan noted, with the 30-year fixed rate increasing to 6.97% after three weeks of declines.
“Mortgage applications continued to show sensitivity to rate movements, and both purchase and refinance activity decreased over the week,” he said. “With housing supply low and prices high, the average loan size for purchase applications increased to the highest level since May 2022.”
According to MBA’s latest weekly survey, the refinance share of total mortgage activity saw a minor decline to 31.2% from 31.6%. The adjustable-rate mortgage (ARM) share also experienced a decrease, falling to 7.2% of total applications.
Conversely, the FHA share of total applications edged up slightly to 12.1% from 12%, while the VA share dipped to 12.1% from 12.2%. The share of applications through the USDA remained stable at 0.5%.
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