An uptick in refinancing helped to boost mortgage applications during the week ending Sept. 27, according to new data from the Mortgage Bankers Association (MBA).
The Market Composite Index increased 8.1 percent on a seasonally adjusted basis from one week earlier, while the unadjusted index rose by an even eight percent. Both the seasonally adjusted and unadjusted Purchase Index were up by one percent from one week earlier, with the latter 10 percent higher than the same week one year ago. The Refinance Index increased 14 percent from the previous week and was 133 percent higher than the same week one year ago, while the refinance share of mortgage activity increased to 58 percent of total applications from 54.9 percent during the previous week.
All three major federal loan programs saw declines during the week: The FHA share of total applications decreased to 10.4 percent from 11.4 percent, the VA share of total applications decreased to 12.4 percent from 13.1 percent and the USDA share of total applications decreased to 0.5 percent from 0.6 percent.
“Mortgage rates mostly decreased last week, with the 30-year fixed rate dropping below four percent for the sixth time in the past nine weeks,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Borrowers responded to these lower rates, leading to a 14 percent increase in refinance applications. Although refinance activity slowed in September compared to August, the months together were the strongest since October 2016. The slight changes in rates are still causing large swings in refinance volume, and we expect this sensitivity to persist.”