Mortgage Applications Drop as Interest Rates Rise Above 4%

Mortgage applications declined for the period ending March 6 as interest rates exceeded the 4% mark for the first time since early January.

The Mortgage Bankers Association's market composite index decreased 1.3% on a seasonally adjusted basis from the prior week when mortgage application volume rose by 0.1%.

The refinance gauge was down 3% week over week to its lowest level since January, accounting for 60% of total applications. Meanwhile, the purchase index was up 3% from one week ago, as the average loan size for purchase applications increased to its highest figure since the survey started 25 years at $294,900.

Interest rates for 30-year fixed conforming mortgages and jumbo loans both elevated in the first week of March. The average contract interest rate for conforming loan balances below $417,000 increased five basis points from the previous week, to 4.01%. Furthermore, jumbo loan balances above $417,000 saw the average interest rate rise seven basis points, to 4.02%.

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