Refinancings drop as government activity falls

Another drop in refinancings pushed down mortgage application volume last week, as the government reworked fewer loans.  

Applications for home loans decreased 2.7 percent for the week ending March 23, the Mortgage Bankers Association said Wednesday in its weekly survey. 

The refinance index fell 4.6 percent from the previous week, the sixth consecutive week with a decrease, falling to its lowest level since December. The index is 24.2 percent lower than its peak, which was hit in February. 

Most of the decrease can be attributed to a 12 percent drop in government refinance activity, while conventional refinance applications fell by less, decreasing 3.4 percent from the previous week.

The seasonally adjusted purchase index increased 3.3 percent from a week earlier.

The four-week moving average, a less-volatile measure than the weekly figure, is down 3.4 percent. The average is up 2.14 percent for the seasonally adjusted purchase index, while it is down 4.94 percent for refinancing.

The refinance share of mortgage activity decreased to 71.9 percent of total applications, the lowest level since July 2011, from 73.4 percent the previous week. 

In February, the investor share of applications for home purchase was at 6.1 percent, a decrease from 6.4 percent in January, led by a decrease in the New England region. 

In addition, the share of purchase mortgages for second homes decreased to 5.8 percent in February from 5.9 percent in January.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.23 percent — the highest rate since November 2011 — from 4.19 percent.

The rate on 30-year loans with jumbo balances (greater than $417,500) increased to 4.54 percent, the highest rate since December 2011, from 4.49 percent.

For 30-year fixed-rate mortgages backed by the Federal Housing Administration, rates increased to 3.96 percent from 3.93 percent.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.5 percent, the highest rate since December 2011, from 3.47 percent.