With interest rates hitting their highest level since September, mortgage application activity declined for the third straight week, according to the Mortgage Bankers Association.
The total volume of loan applications fell by a seasonally adjusted 11.4% in the week to February 19 and by 10% unadjusted compared to the previous week. In contrast to rising mortgage rates, the refinancing share of credit activity continues to decline, dropping from 69.3% in the previous week to 68.5%.
The refi index fell 11.3% weekly but was 50% higher than at the same time a year ago. The buy share rose from 30.7% to 31.5% and the index declined 7.8% from last week while increasing 7% annually. The average purchase credit size rose from $ 412,200 the previous week to another new record high of $ 418,000.
Brutal weather also contributed to a regional decline in activity. "The severe Texas winter weather has hit many households and lenders, causing the state to drop more than 40% in purchase and refinance requests over the past week," said Joel Kan, vice president of economic and industrial forecasting for MBA, in a press release.
The total application rate of Federal Housing Administration guaranteed loans increased to 11.2% from 9% the previous week, Department of Veterans Affairs loans decreased from 13.2% to 11.9%, and US Department of Agriculture loans decreased decreased from 0.4 to 0.3%. The proportion of variable-rate mortgages rose from 2.47% to 2.56%.