The total number of applications for new home loans declined 2 percent in the week ending April 1, as refinances tumbled significantly, according to the latest statistics from the Mortgage Bankers Association. Overall, the number of consumers who sought refinances for their existing home loans fell 6.2 percent as interest rates rose once again. It was the lowest level for refinances since the week ending February 25.
Meanwhile, purchases actually increased 6.7 percent, the report said. This was the highest level observed since the new year began.
“Purchase application volume increased last week reaching the highest level of the year, but remains relatively low by historical standards, at levels last seen in 1997,” said Michael Fratantoni, MBA’s vice president of research and economics. “Borrowers were likely motivated to apply before a scheduled increase in FHA insurance premiums that became effective last Friday.”
Overall, the refinance share of the entire mortgage market fell to 61.2 percent, down from 64.3 percent the week prior, the report said. It was the lowest market share for refinances since May 7, 2010.
Often, consumers avoid refinancing their existing mortgage when interest rates rise appreciably from one week to the next, though even the higher levels are often below the amount most homeowners pay on their existing agreements.