March was a good month for the mortgage market with application volume growing for four straight weeks, but as the month ended, so did the winning streak. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, decreased 4.1 percent on a seasonally adjusted basis during the week ended March 31. On an unadjusted basis, the Index was down by 4 percent compared with the previous week. The Refinance Index fell 5 percent from the previous week and was 59 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 28.6 percent of total applications from 29.1 percent. [refiappschart] The seasonally adjusted Purchase Index decreased 4 percent and was 3 percent lower before adjustment. The Index is now down 35 percent compared to the same week in 2022. [purchaseappschart] “Spring has arrived, but the housing market is missing the customary burst in listings and purchase activity that typically mark the season. After four weeks of increasing purchase application activity, volume declined a bit this week even with another small drop in mortgage rates,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Additionally, refinance application volume continues to be quite low. Although the mortgage rate for conforming balance loans declined by five basis points over the week to 6.40 percent, the mortgage rate for jumbo loans increased by nine basis points to 6.36 percent. 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. In recent years, most jumbo loans have been kept on depository balance sheets.”
