Mortgage Applications Rising
Some good news was reported by the Mortgage Bankers Association (MBA) in terms of the national housing market. Mortgage applications rose 11.2 percent for the week ending March 7, 2025, from a week earlier. This can only mean one thing: More people are seeking a new home. This is welcome news for a housing market that has been suffering through a severe downturn, due mostly to high interest mortgage rates and high prices. Refinances were up 16%, adding even more welcome news. This figure was 90% higher than a year ago.
Why? Mortgage rates declined for the sixth consecutive week. The 30-year fixed rate is now at 6.73% - the lowest since October of 2024. Applications were up even more (31%) compared to a year ago. "As we enter the spring homebuying season, the purchase index was more than 4% higher than a year ago, and activity was up across all loan categories. Government purchase applications (Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the USDA), experienced an 11% increase – helped by the FHA rate dropping to 6.34%. “As we enter the spring homebuying season, the purchase index was more than 4% higher than a year ago, and activity was up across all loan categories. Additionally, loan sizes were higher, with the average purchase loan amount hitting $460,800, the highest in the survey dating back to 1990," said Joel Kan, MBAs vice president.
The refinance part of mortgage activity rose 45.6% compared to 43.8% the prior week. The VA share of applications rose 15.9% compared to 14.6% the prior week.
The average contract interest rate of 30-year-fixed rate mortgages with conforming loan balances of $806,300 or less decreased to 6.67% from 6.73% last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances of $806,500 or less decreased to 6.68% from 6.83% last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.04% from 6.12%.
The survey covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels. The survey has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, thrifts, and credit unions.
Finally, the average interest rate for 5/1 arms decreased to 5.81% from 5.85% last week.