Only government refinance activity saw an increase
Applications for both refinance and purchase mortgages last week, according to the Mortgage Bankers Association.
The MBA’s market composite index went down 6.4% week over week on a seasonally adjusted basis and 5% on an unadjusted basis.
The refinance index dropped 8% week over week and was 165% higher year over year. The seasonally adjusted purchase index dwindled 3% but increased 2% on an unadjusted basis.
"Treasury yields moved slightly higher last week, despite uncertainty surrounding the economic impact from the spread of the coronavirus,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. “The 30-year fixed mortgage increased five basis points to 3.77%. As a result, causing refinance applications – driven by an 11% drop in applications for conventional refinance – to fall. Even with an 8% decline, the refinance index was still at its third-highest reading so far this year. Government refinance activity, which tends to lag movements in the conventional market, bucked the overall trend, as VA loan refinances jumped 23%."
Kan said that that last week’s pullback is holding back some prospective homebuyers.
"Purchase applications fell 3% last week, as there continues to be some pullback after a strong January,” Kan said. “Activity was still 10% higher than a year ago, but too few options, especially at the lower portion of the market, are slowing some would-be buyers."
The refinance share of mortgage activity decreased to 63.2% of total applications, down from 65.5% last week. The adjustable-rate (ARM) share of activity shrank to 5.4% of total applications.
The FHA of total applications inched down from 9.7% the week before to 9.5%. Meanwhile, the VA share of total applications climbed to 12.1% from 10.1% week over week. The USDA share of total applications, on the other hand, held steady at 0.4%.
