Mortgage applications rose 3.3% from one week prior and credit mortgage availability increased 0.4% to 177.8 in February according to separate reports released from the Mortgage Bankers Association’s (MBA).
The Market Composite Index, which tracks mortgage loan application volume, increased 3.3%, taking into account a seasonally adjusted basis from the previous week. On an unadjusted basis, the Index spiked 16% over one week ago. The Refinance Index rose to the highest level since December of 2016, with an increase of 5%.
The seasonally adjusted Purchase Index increased 2% and the unadjusted Purchase Index increased 15% compared with the preceding week, a full 4% over than the same week one year ago. Refinance activity increased to 45.4% of total home loan applications.
Average loan size for mortgage applications hit a survey high, reportedly hitting $313,000.
The FHA and VA share of total loan applications dipped slightly from the previous week, with FHA apps totaling 11.8% and VA total apps decreased of 11.6%. USDA total home loan applications were unchanged at 0.9%.
Meanwhile, mortgage credit availability increased in February according to the Mortgage Credit Availability Index (MCAI). A decline in the MCAI signals that lending standards are tightening, while rises in the index demonstrate loosening credit.
Lynn Fisher, MBA’s Vice President of Research and Economics, attributed the loosening of credit availability to two primary factors: 1) there was an increase in low mortgage down payment options for homebuyers and 2) FHA and VA streamlined their documentation. She added, “However, the impact of that increase [in low down payment] on the overall index was partially offset by the first downturn in the availability of jumbo credit in a year due to the consolidation of some jumbo mortgage programs.”
Of the four component indices, the Government MCAI showed the greatest expansion in mortgage credit availability over last month, with an increase of 2.3%. The Conforming MCAI showed a slight uptick of 0.1%. The Conventional MCAI dropped 2.2% and the Jumbo MCAI fell 4.4%.