Mortgage applications reached their highest volume in nearly 20 months last week, boosted by an uptick in refinance applications.
The Mortgage Bankers Association’s (MBA) Weekly Applications Survey indicated that mortgage applications increased 16.8% the week ending Aug. 9, from the week prior.
The Refinance Index in particular jumped 118% annually and 35% on a weekly basis. Purchase applications rose by 3% from the week prior and the purchase index was 8% lower year over year. On an unadjusted basis, the MBA’s Market Composite Index increased 15% compared with a week earlier.
“Rates on both 30- and 15-year fixed rate mortgages decreased for the second consecutive week, and combined with the previous week’s rate moves, spurred another strong week for application activity as borrowers with higher rates took the opportunity to refinance,” MBA’s Vice President and Deputy Chief Economist Joel Kan commented. “Overall applications increased almost 17 percent to the highest level since January 2023, driven by a 35 percent increase in refinance applications. The refinance index also saw its strongest week since May 2022 and was 117 percent higher than a year ago, driven by gains in conventional, FHA, and VA applications. Additionally, purchase applications increased by 3 percent, with small gains seen across the various loan types, indicating that prospective homebuyers are slowly reentering the market.”
Among total application activity, the refinance share increased from 41.7% to 48.6% from the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.3% of total applications; the FHA share moved up slightly from 13.4% to 13.5%; and, the VA share rose from 14.3% to 16.8%. The only decrease was experienced by USDA applications, which declined in total share from 0.4% to 0.3%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.54% from 6.55%, with points decreasing to 0.57 from 0.58 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) increased to 6.78% from 6.77%, with points decreasing to 0.37 from 0.50 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
