Mortgage applications increased 10.4% last week, according to the Mortgage Bankers Association.
The Market Composite Index, a key measure of mortgage loan application volume, showed a seasonally adjusted rise of 10.4% from the previous week. When unadjusted, the increase stood at an impressive 26%.
The Refinance Index, which tracks refinancing applications, rose by 11% from the previous week and was 10% higher than the same week in the previous year. The seasonally adjusted Purchase Index, indicating the number of applications for home purchases, increased by 9% from the previous week. The unadjusted Purchase Index climbed 28% compared with the prior week but was 20% lower than the same week one year ago.
“Mortgage rates declined across all loan types as Treasury yields moved lower last week on incoming inflation data, which helped to support a rise in mortgage applications. The 30-year fixed rate decreased six basis points to 6.75 percent, the lowest rate in three weeks,” MBA’s Vice President and Deputy Chief Economist Joel Kan said. “Compared to a holiday-adjusted week, both purchase and refinance applications were up, and the increases were heavily driven by the conventional market. Although purchase activity is lagging year-ago levels, refinance applications have improved from their recent low point and have been showing year-over-year gains, albeit at low levels. If rates continue to ease, the MBA is cautiously optimistic that home purchases will pick up in the coming months.”
The refinance share of total mortgage activity dropped slightly to 37.5% from 38.3% the previous week. The adjustable-rate mortgage (ARM) share of total applications rose to 5.9%.
In terms of specific loan types, the FHA share of total applications marginally decreased to 14.3%, while the VA share dropped to 14.2% from 16.3% the previous week. The USDA share of total applications saw a small increase to 0.5%.
Average contract interest rates for various mortgage types all decreased compared to the previous week. The 30-year fixed-rate mortgage with conforming loan balances saw a decrease to 6.75%, and the rate for jumbo loans dropped to 6.86%. FHA-backed 30-year fixed-rate mortgages fell to 6.46%. Similarly, the average rate for 15-year fixed-rate mortgages decreased to 6.24%, and 5/1 ARMs saw a decrease to 6.14%.
