Mortgage application volumes defied recent trends and higher rates to increase for the first time in four weeks — albeit from depressed levels, the Mortgage Bankers Association said.

The MBA’s Market Composite Index, a measure of loan activity based on surveys of association members, surged a seasonally adjusted 7.4% compared to the prior week for the period ending March 3. Compared to the same week one year ago, application volumes came in 59.9% lower. 

“Even with higher rates, there was an uptick in applications last week, but this was in comparison to two weeks of declines to very low levels, including a holiday week.” said Joel Kan, MBA vice president and deputy chief economist, in a press release. 

Both purchases and refinances increased, but “many borrowers are waiting on the sidelines for rates to come back down,” Kan added.

The seasonally adjusted Purchase Index climbed up 6.6% from the previous survey, but the new reading still landed 42.3% below its level from a year earlier. 

The Refinance Index was up by 9.4% from one week prior but stood 76% lower on an annual basis. The share of refinance applications relative to total activity also edged upward to 28.9% from 28.7%. 

Meanwhile, the share of adjustable-rate mortgages increased as well for another week, picking up recently at the same time rates started their upswing. ARMs made up 8.6% of all applications, climbing from 8.1%.

Federally sponsored mortgage applications helped lead increased business activity among lenders over the weekly period, picking up at even a more rapid pace compared to overall numbers. The seasonally adjusted Government Index surged by almost 13% week over week. 

Likewise the share of government-backed loans increased, with Federal Housing Administration-backed mortgages accounting for 12.8%, up from 12%. Loans guaranteed by the Department of Veterans Affairs garnered a 12% share, compared to 11.6% seven days earlier. The slice of applications coming through the U.S. Department of Agriculture remained at 0.5% week over week.  


The influx of government-backed purchase loans, up a seasonally adjusted 10.8% for the week, helped bring down the mean size from all home-buying applicants for a third straight week. Average purchase amounts inched down 0.6% to $425,700 from $428,400 seven days prior.

The recent decreasing sizes come as Redfin reported last week its first annual decline in home prices in over a decade. Meanwhile, other researchers, including economists at CoreLogic and Fannie Mae, similarly see average housing costs eventually falling on a year-over-year basis at some point in the first half of 2023.

As the average amount of purchases diminished, though, new refinance application sizes headed in the other direction, the MBA said. The average refinance size clocked in at $264,500, 0.2% higher compared to $263,900 the previous week. Overall, the mean application amount, inclusive of both purchases and refinances, also headed up 0.8% to $379,200 from $376,100.

The latest acceleration of mortgage demand came despite an ongoing rise in average interest rates, which went up again across all categories tracked by the association. 

The contract rate for 30-year fixed mortgages with balances below the conforming amount of $726,200 averaged 6.79%, up 8 basis points from 6.71% the prior week. Points inched up to 0.8 from 0.77 for 80% loan-to-value ratio loans. The latest average among MBA member lenders sits 270 basis points higher than where it was last year. 

The average fixed contract rate of 30-year jumbo mortgages with balances above the conforming total rose to 6.49% from 6.44%. Points increased to 0.59 from 0.49.

The fixed contract rate of 30-year FHA-backed mortgages jumped to 6.56% from 6.45% seven days earlier. Points also increased to 1.21 from 1.19.

The 15-year fixed-rate mortgage average surged 12 basis points to 6.25% from 6.13% the prior week, with points increasing to 1.01 from 0.93 from 80% LTV loans.

Average hybrid mortgage rates also increased, with the mean 5/1 ARM coming in at 5.75%, compared to 5.73% over the previous weekly period. Points increased to 0.95 from 0.86.

The latest report factors in newly revised results dating from mid-January to late February following an update of previously submitted data from a survey participant, the MBA said. Seasonal adjustments were recalculated and changed slightly. The revised numbers show higher purchase-application numbers during the period, while refinance volumes were actually lower. Mortgage rates were mostly unchanged.

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