- Average contract interest rate for 30-year fixed rate mortgages unchanged at 3.45%
- Total mortgage application volume down -0.3%, according to Mortgage Bankers Association
Despite record low interest rates, averaging 3.45% for a 30-year fixed- rate mortgage with conforming loan balances, the total volume of mortgage applications dropped -0.3% from the week before.
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In keeping with the “new normal,” demand for refinance mortgages remained high as demand for purchase mortgages remained sitting at a five-year low, according to the Mortgage Bankers Association (MBA).
Total mortgage application volume was +70% higher than one year ago and refinance volume on its own, though slipping -1% during the week, was steeply +225% higher than last year. (A taste for refinance applications may be driven by some homeowners wanting a cash cushion if/when the economy drops further.) Purchase applications increased +2% but were 31% lower than last year at this time.
Joel Kan, an economist with the MBA, explained lower demand for purchase applications by saying, “The pandemic-related economic stoppage has cause some buyers and sellers to delay their (home buying/selling) decisions until there are signs of a (economic) turnaround. This has resulted in reduced buyer traffic, less inventory and March existing-home sales falling to their slowest annual pace in nearly a year.”
Mortgage demand in New York, the hardest hit state by the pandemic, continued falling during the week. Mortgage demand in California and Washington, both hard hit by COVID, rose but was still off by -40% compared to the same week last year. The refinance share of the mortgage market dropped from 76.2% to 75.4% and the adjustable-rate mortgage share of the total market was up +2.8%.
Thanks to CNBC’s Diana Olick.