Mortgage applications climbed 14.2% in one week’s time, a byproduct of sinking mortgage rates and further drops anticipated.
The Mortgage Bankers Association (MBA) released its Weekly Applications Survey Wednesday, indicating that mortgage loan application volume increased 14.2% on a seasonally adjusted basis for the week ending September 13, rising 26% on an unadjusted basis.
Refinance activity was particularly pronounced – jumping 24% from the previous week and 127% year-over-year.
“Application activity was up significantly last week, as market expectations of a rate cut from the Fed pulled mortgage rates lower,” MBA Vice President and Deputy Chief Economist Joel Kan pointed out. “The 30-year fixed mortgage rate, at 6.15 percent, is now at its lowest since September 2022 and is more than a full percentage point lower than a year ago. Refinance applications were up 24 percent – more than double last year’s pace, with both conventional and government activity jumping to the fastest pace of refinancing since 2022.”
The MBA’s seasonally adjusted Purchase Index increased 5% over the previous week and 15% on an unadjusted basis but was 0.4% lower than the same week a year ago.
“It is notable that conventional purchase applications increased to a pace ahead of last year, which also drove overall purchase applications very close to year-ago levels,” Kan added. “Homebuyers are seeing improving affordability conditions, sparked by lower rates and slower home-price growth.”
Homebuyers are favoring newly built homes, with applications for new home purchases up 4.4% this August, YOY.
Among total mortgage applications submitted last week, 51.2% were for refinances, up from 46.7% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 5.9% of total applications; the FHA share of total applications increased to 15.2% from 14.7% the week prior.
The VA share of total applications increased to 16.8% from 16.4% the week prior.
The USDA share of total applications remained unchanged at 0.4% from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.15% from 6.29%, with points increasing to 0.56 from 0.55 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) decreased to 6.41% from 6.56%, with points increasing to 0.55 from 0.33 (including the origination fee) for 80% LTV loans.
