Mortgage application volume falls 4.8% as applicant pool shrinks

The number of mortgage applications for the week ending Feb. 26 fell 4.8% from the previous week as the pool of consumers seeking to take advantage of historically low interest rates continues to shrink, according to the latest weekly data released Wednesday by the Mortgage Bankers Association.

Refinance applications also declined, down 7% week-over-week. The average amount for refinance loans totaled $279,200. VA refinance applications, which are for loans to veterans and their spouses and are guaranteed by the U.S. Department of Veterans Affairs, led the decline with an 18% drop.

“Despite a slight drop in rates, refinance applications decreased overall," said Joel Kan, MBA's associate vice president for forecasting and industry surveys. "Applications for both conventional and government refinance loans decreased, as the supply of borrowers who could benefit from rates at this level begins to diminish."

The share of total applications insured by the Federal Housing Administration, called FHA loans, remained unchanged from 12% the week prior. The VA share of total applications fell to 12.1% from 13%.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances -- or loans that are $417,000 or less -- fell to 3.83% from 3.85%. Points decreased to 0.39 from  0.42, including the origination fee.

The average interest rate for 30-year fixed-rate mortgages with jumbo loan balances -- or loans that are greater than $417,000 -- dipped to 3.75% from 3.80%. Points rose to 0.31 from 0.25.

FHA loans' average interest rate for 30-year fixed-rate mortgages fell to 3.67% from 3.72%, with points falling to 0.40 from 0.45. 

The interest rate for 15-year fixed-rate mortgages increased to 3.13% from 3.12%, with points falling to 0.31 from 0.40.