The demand for homeownership rose by 11% in the past week, if mortgage application volume is any indication.
Mortgage applications increased 11% in the week ending September 20, the Mortgage Bankers Association (MBA) reported in its latest Weekly Applications Survey.
The Refinance Index increased 20% from the previous week and was 175% higher than the same week one year ago.
The seasonally adjusted Purchase Index increased 1% from one week earlier. The unadjusted Purchase Index increased by 0.4% compared with the previous week and was 2% higher than the same week one year ago.
“Mortgage applications increased to their highest level since July 2022, boosted by a 20 percent increase in refinance applications after a large increase the prior week,” MBA Vice President and Deputy Chief Economist Joel Kan said. “The 30-year fixed-rate decreased for the eighth straight week to 6.1 percent, while the FHA rate decreased to 5.99 percent, breaking the psychologically important 6 percent level."
As a result of lower mortgage rates, week-over-week gains for both conventional and government refinance applications increased sharply.
“The refinance share of applications is now at 55.7 percent, and while the level of refinance activity is still modest compared to prior refi waves, they now account for the majority of applications, given the seasonal slowdown in purchase activity,” added Kan. “Average loan sizes were higher both for purchase and refinance applications, which pushed the overall average loan size to its highest in the survey’s history at $413,100.”
- The refinance share of mortgage activity increased to 55.7% of total applications from 51.2% the previous week.
- The adjustable-rate mortgage (ARM) share of activity remained unchanged, at 5.9% of total applications.
- The FHA share of total applications decreased to 15% from 15.2% the week prior.
- The VA share of total applications increased to 18.3% from 16.8% the week prior.
- The USDA share of total applications decreased to 0.3% from 0.4% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.13% from 6.15%, with points increasing to 0.57 from 0.56 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
