Mortgage demand rises for fourth week in a row as rates fall to the lowest level in a month

Demand for purchases and refinancing both rose. That pushed the market composite index — a measure of mortgage application volume — up, the Mortgage Bankers Association (MBA) said on Wednesday. 

The market index rose by 2.9%, to 227.3, for the week ending March 24 from a week earlier. A year ago, the index stood at 425.1.

Key details: The refinance index rose 4.8%, but was down 61% compared to a year ago. 

The purchase index — which measures mortgage applications for the purchase of a home — rose by 2% from last week. 

The average contract rate for the 30-year mortgage for homes sold for $726,200 or less was 6.45% for the week ending March 24.

That’s down from 6.48% the week before, the MBA said. 

For homes sold for over $726,200, the average rate for the 30-year was 6.27%, down from 6.3% the previous week.

The 15-year fell to 5.84%, from last week’s 6.02%.

The rate for adjustable-rate mortgages rose to 5.62% from last week’s 5.58%.

The big picture: Spring season is upon us and buyers are responding to dips in mortgage rates. 

On the supply side, there are still challenges with low inventory. 

But home prices are slowing and sellers are caving in to price cuts and concessions, which is making homes less expensive — and attractive — for home buyers. 

What the MBA said: “Home-price growth has slowed markedly in many parts of the country, which has helped to improve buyers’ purchasing power,” Joel Kan, vice president and deputy chief economist at the MBA, said.

He added that while refinancing activity picked up last week, it’s wasn’t a big group. “Most homeowners still have rates significantly lower than current levels, leaving only a small pool of borrowers with an incentive to refinance,” Kan said.

Market reaction: The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.471%
was above 3.5% in early morning trading Wednesday.