The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a increase of 4.7% in the group's seasonally adjusted composite index. The seasonally adjusted purchase index increased by 4.00% from the prior week's report.
On an unadjusted basis, the composite index increased by 7.0% week-over-week. The unadjusted purchase index increased by 2.0% for the week, but it is 15% lower year-over-year.
The MBA's refinance index increased by 10%, and the share of refinancings rose by two points to 64% of all applications. Adjustable rate mortgage loans accounted for 7.0% of all applications, down from 8.0% the prior week.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.66% to 4.58%, the lowest level since November 2013. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.58% to 4.57%. The average interest rate for a 15-year fixed-rate mortgage fell from 3.72% to 3.68%.
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The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.28% to 3.23%, the lowest level since December 2013.
The drop in interest rates in the past two weeks are in contrast with the recent trend of rising rates since November. Mortgage applications fell to their lowest level since December 2000 at the end of 2013, following the announcement by the U.S. Federal Reserve that it would begin tapering its $85 billion per month bond-buying program.
This turnaround in purchase applications could signal a strong spring season for the housing market.