Mortgage Purchase Applications Unchanged, Refinancing Falls

Despite a jump in mortgage rates, purchase applications for home mortgages remained unchanged on a seasonally adjusted basis in the April 20 week, while the typically more interest rate sensitive applications for refinancing did register a small decline of 0.3 percent. Unadjusted, purchase applications were a sharp 11 percent higher than in the same week a year ago. The refinance share of mortgage activity fell 0.4 percentage points from the previous week to 37.2 percent, the smallest share since September 2008. Mortgage rates rose to the highest level since September 2013, with the average interest rate on 30-year fixed rate conforming mortgages ($453,100 or less) rising 7 basis points from the previous week to 4.73 percent. Rising interest rates tend to dampen home buyer enthusiasm, but the impressive 11 percent year-on-year gain in purchase applications shows buyers are still undeterred and confirms the continuation of the solid and accelerating pace of the housing sector indicated by the existing and new home sales reports for March released earlier this week.