A slight decline in mortgage rates sent total mortgage application volume up 5.8 percent last week on a seasonally adjusted basis compared to the previous week, the Mortgage Bankers Association reported Wednesday. Applications for home purchases, a gauge of future homebuying activity, rose 7 percent, while refinance applications increased 5 percent, reaching the highest level since December.
Still, applications should be much higher, the MBA notes. Applications for home purchases are 5 percent lower than a year ago, and applications for refinances are 45 percent lower. Interest rates are about 50 basis points higher than a year ago.
The average on a 30-year fixed-rate mortgage decreased slightly to 4.3 percent last week from 4.36 percent, the MBA reported. The dip is expected to be short-lived. Earlier this week, the Federal Reserve cautioned that a March rate hike was looking more likely.