Mortgage applications surged for the second consecutive week, with declining home financing rates revitalizing refinancing activity. According to insights from the Mortgage Bankers Association, the market composite index, which assesses loan application volume, increased by 11.2% for the week ending last Friday, adjusted for seasonal variations.
If we exclude seasonal adjustments, the index saw a rise of 12%. The 30-year mortgage rate for conforming loan balances of $806,500 or less decreased to 6.67%, the lowest point since October, down from the previous week's rate of 6.73%. Meanwhile, for loans with balances exceeding this amount, the rate fell to 6.68% from 6.83%.
Interestingly, mortgage applications rose by 31% compared to a year earlier. The refinance index also demonstrated notable growth, climbing 16% from the previous week and skyrocketing by 90% year-over-year. Furthermore, the rate for 30-year loans backed by the Federal Housing Administration saw a decrement, dropping to 6.34% from the prior week's 6.42%.
Additionally, the share of FHA loans dipped to 16.1% of total applications, a slight decrease from 16.7%. When examining the seasonally adjusted purchase index, there was a 7% increase week-on-week. Without seasonal adjustments, the purchase index rose by 8% from the previous week and marked a 4% improvement annually.
As we step into the spring homebuying season, the purchase index was over 4% higher than a year ago, with stronger activity observed across all loan categories. Notably, the average purchase loan amount reached $460,800, the highest recorded since the survey began in 1990. These developments reflect a dynamic and changing market that potential homebuyers and investors should carefully navigate..