A bigger spike came via the Refinance Index, which increased 15 percent from the previous week to reach its highest level since June 2013; it was also 183 percent higher than the same week one year ago.
The seasonally-adjusted Purchase Index decreased 10 percent from one week earlier. The unadjusted Purchase Index increased eight percent compared with the previous week, and was 11 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 64.5 percent of total applications from 60.4 percent the previous week.
All three major federal home loan programs recorded declines: the FHA share of total applications decreased to 9.6 percent from 10.7 percent the week prior while the VA share of total applications tumbled to 10.2 percent from 11.7 percent and the USDA share of total applications dipped to 0.4 percent from 0.5 percent.
“The 10-year Treasury yield fell around 20 basis points over the course of last week, driven mainly by growing concerns over a likely slowdown in Chinese economic growth from the spread of the coronavirus,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan. “This drove mortgage rates lower, with the 30-year fixed rate decreasing for the fifth time in six weeks to 3.71 percent, its lowest level since October 2016. Refinance activity jumped as a result, with an increase in the number of applications and a spike in the average loan amount, as homeowners with jumbo loans reacted more resoundingly to lower rates.”