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Mortgage applications were on the rise last week, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA), but the gains were fueled by refinance activity and not the purchase market.
The Market Composite Index increased 2.9 percent on a seasonally adjusted basis and three percent on an unadjusted basis from one week earlier. However, the seasonally adjusted Purchase Index decreased 0.1 percent from one week earlier, while the unadjusted index was down 0.2 percent compared with the previous week and was 14 percent below the level recorded during the same week one year ago.
Instead, the positive action was over on the refinance side of the business. The Refinance Index increased five percent from the previous week while the refinance share of mortgage activity increased to 63.8 percent of total applications from 62.7 percent the previous week.
Among the federal home loan programs, the FHA share of total applications decreased to 10 percent from 10.2 percent the week prior and the VA share of total applications decreased to 11.4 percent from 11.9. The USDA enjoyed a slight uptick, with its share of total applications up to 0.7 percent from 0.6 percent the week prior.