Banking concerns as of late helped keep rates low, which appears to have boosted buyer confidence for the moment, as the Mortgage Bankers Association reports that applications have once again increased for the third week in a row.
According to the MBA, mortgage applications increased 3 percent from one week earlier for the week ending March 17. The Refinance Index increased 5 percent from the previous week and was 68 percent lower than the same week one year ago.
“Treasury yields declined last week, driven by uncertainty over the health of the banking sector and worries about the broader impact on the economy. Mortgage rates declined for the second week in a row, with the 30-year fixed rate dropping to 6.48 percent, the lowest level in a month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “However, mortgage rates have not dropped as much as Treasury rates due to increased MBS market volatility. The spread between the 30-year fixed and 10-year Treasury remained wide at around 300 basis points, compared to a more typical spread of 180 basis points.
“Both purchase and refinance applications increased for the third week in a row as borrowers took the opportunity to act, even though overall application volume remains at relatively low levels,” Kan added.