Fratantoni noted last week that the March jobs report showed a labor market that is “still quite strong but beginning to flag, lagging other indicators of a slowing economic activity and tightening credit.” MBA expects the unemployment rate to rise to 4.8% by the end of the year.
MBA’s refinance index edged up one basis point from the previous week, and the purchase index rose 8% from one week earlier. However, the refinance share of mortgage activity dropped from 28.6% to 27% of total applications. The adjustable-rate mortgage share also decreased to 6% of total applications.
“Prospective homebuyers this year have been quite sensitive to any drop in mortgage rates, and that played out last week with purchase applications increasing by 8%,” Fratantoni said. “Refinance application volume was a mixed bag with total volume essentially flat, conventional volume down for the week, but VA refinance volume increasing. The level of refinance activity remains almost 60% below last year, as most homeowners are currently locked in at much lower rates.”
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