The MBA's March 20 forecast for the first quarter was unchanged from last month. It said it expects purchase originations will fall 30% to $267 billion, while refinances will fall 79% to $66 billion.

However, the National Association of Realtors reported Tuesday that existing home sales in February rose 14.5% from January, breaking a 12-month streak of declines, and prices fell for the first time in nearly 11 years.

And on Wednesday, the MBA reported that mortgage applications have been rising in each of the past three weeks.

For the week ending March 17, its mortgage applications index rose by a seasonally adjusted 3% from the previous week. Purchases were 3% higher than the previous week, but down 36% from a year earlier. Refinances rose 5% from the previous week, but were down 68% from a year ago.

Joel Kan, the MBA's deputy chief economist, said recent drops in mortgage rates have fueled the recent bump in activity.

"Both purchase and refinance applications increased for the third week in a row as borrowers took the opportunity to act, even though overall application volume remains at relatively low levels," Kan said.

Joel Kan

Kan said last week's fall in Treasury yields was driven by uncertainty over the health of the banking sector and worries about the broader impact on the economy. Mortgage rates fell for the second week in a row, with the 30-year fixed rate dropping to 6.48% — its lowest level in a month.

"However, mortgage rates have not dropped as much as Treasury rates due to increased MBS market volatility," he said. "The spread between the 30-year fixed and 10-year Treasury remained wide at around 300 basis points, compared to a more typical spread of 180 basis points."

Last October, CUNA and the MBA forecasted a mild first-half recession. CUNA has amended that forecast to say it will occur in the second half. As measured by two consecutive declines in gross domestic product (a usual marker for recessions), the MBA cut its GDP drops for the first half again so that it now barely shows two consecutive quarterly drops: Down 0.1% in the first quarter followed by a 0.6% drop in the second quarter.

In January it showed a first-quarter drop of 1.8%, which it pared to 1.6% in February. The second-quarter drop fell from 1.4% in its Jan. 19 forecast to 0.6% in the Feb. 21 forecast.

Whatever the year's economic growth, the MBA said it expects purchase originations to fall 11% to $1.41 trillion in 2023, and rise 18% to $1.67 trillion in 2024. It said it expects refinances to fall 35% to $432 billion this year, followed by a 47% gain to $635 billion in 2024.