Growing charges decrease the refi apps, however haven’t any impact on the purchases

Rising mortgage rates have continued to hamper refinancing requests, but the purchase volume is still ahead of 2020 activity, according to the Mortgage Bankers Association.

The Market Composite Index, a measure of the volume of mortgage loan applications, fell by a seasonally adjusted 1.3% from a week earlier, due to a 5% decline in refis.

However, home purchases increased by 7% seasonally adjusted and 9% unadjusted year over year.

Mortgage rates have increased 40 basis points since early 2021, driven by faster-than-expected economic growth, an improved labor market, and the availability of multiple coronavirus vaccines, Joel Kan, the MBA's vice president of economic and industrial forecasting, said in a press release.

"With the spring buying season on the doorstep, the buying market was strongest in four weeks, with increases in both conventional and government applications," added Kan. "Loan sizes have been moderated for the second straight week – possibly a sign that more first-time buyers are entering the market."

Compared to the same week last year, the unadjusted Market Composite Index fell by 32%, the Refis by 43%, but purchases by 2%.

The proportion of refinancing applications decreased to 64.5% of the total volume compared to 67.5% in the previous week.

The variable rate mortgage portion of the activity increased to 3%. By product type, the Federal Housing Administration accounted for 11.6% of applications this week, with Veterans Affairs loans accounting for 11.1% and the US Department of Agriculture / Rural Housing Service accounting for 0.4%.

A week ago the FHA share was 12.1%, the VA 12.3% and the USDA / RHS 0.4%.

The average contract rate on 30 year fixed rate mortgages with compliant loan balances ($ 548,250 or less) increased from 3.23% to 3.26%.

The average contract rate on jumbo loans valued at over $ 548,250 increased from 3.33% to 3.34%. The average contract rate on the 30-year FHA-insured mortgage rose from 3.19% to 3.2%.

However, the average contract rate for 15 year FRM decreased from 2.64% to 2.63%. The average contract rate for 5/1 ARMs decreased 15 basis points from 2.84% to 2.69%, while the points decreased from 0.58 to 0.37.

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