Mortgage applications rose by 8.9% on a seasonally-adjusted basis from one week earlier for the week ending March 22nd, 2019, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.

On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, rose by 9% from the previous week. The Refinance Index rose 12% over the same period. The seasonally-adjusted Purchase Index rose 6% from one week earlier, while the unadjusted Purchase Index rose 7%.

“The spring buying season is off to a strong start. Thanks to an unexpectedly large drop in mortgage rates following last week’s FOMC meeting, purchase applications jumped 6 percent and refinance applications surged over 12 percent,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting.

The refinance share of mortgage activity rose to 40.4% of total applications, up from 39.2% the previous week, and the adjustable-rate mortgage (ARM) share rose to 7.8% of all applications. The FHA share of total applications fell to 9.3% from 10.4%, the VA share fell to 10.4% from 10.6%, and the USDA share remained unchanged at 0.6%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell to 4.45% from 4.55%. Points for 80% loan to value ratio (LTV) loans fell to 0.39 from 0.42 over the same period. (All 80% LTV loan reports include the origination fee.) The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) fell to 4.35% from 4.37%. Points for 80% LTV loans rose to 0.27 from 0.23, and the effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 4.48% from 4.59%. Points for 80% LTV loans fell to 0.48 from 0.50, and the effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages fell to 3.87% from 3.97%. Points for 80% LTV loans rose to 0.47 from 0.40, and the effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs fell to 3.77% from 3.99%. Points for 80% LTV loans rose to 0.30 from 0.29, and the effective rate decreased from last week.

“Rates dropped across all loan types, and the 30-year fixed-rate mortgage is now more than 70 basis points below last November’s peak,” Kan says. “The average loan size increased once again to new highs for both purchase and refinance loans, as borrowers with – or seeking – larger loans tend to be more reactive to the drop in rates.”