Borrowers have apparently been paying attention. The 22-basis point drop in mortgage rates per Freddie Mac, the largest one-week decline in more than 10 years, triggered a surge in mortgage applications last week, especially for refinancing.
The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of loan application volume, jumped 18.6 percent on a seasonally adjusted basis during the week ended March 29 and was 18.0 percent higher on an unadjusted basis.
The response from those seeking to refinance was especially strong, returning to levels not seen for several years. The Refinancing Index jumped 39 percent compared to the previous week and was at its highest rate since January 2016 while the share of applications for refinancing was 47.4 percent, the largest since January 2018. The share a week earlier was 40.4 percent.
Purchase mortgage applications also moved higher, although with much less enthusiasm to the drop in rates. MBA said its seasonally adjusted Purchase Index was up 3 percent compared to the week ended March 22 and was up 4 percent on a non-seasonally adjusted basis. Purchasing was 10 percent higher than during the same week in 2018.
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