Mortgage applications rose nearly 7% in the latest wk on low interest rates and strong refinance activity, an industry group reports.
Mortgage applications increased 6.8% from 1 wk earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending 7 August.
The Market Composite Index, a measure of mortgage loan application volume, increased 6.8% on a seasonally adjusted basis from 1 wk earlier.
The Refinance Index increased 9% from the previous wk and was 47% higher than the same wk 1 yr ago.
“Mortgage rates fell across the board last week, as investors grew less optimistic of the economic rebound given the resurgence of virus cases. Loan types such as the 30-year fixed, 15-year fixed, and jumbo all reached survey lows,” said MBA’s Associate Vice President of Economic and Industry Forecasting.
“Refi activity responded to these lower rates, with the refi share reaching almost 66 percent of all applications, its highest level since May. And the refi index jumped 9 percent, reaching its highest level since April, as both conventional and government applications for refinances increased,” Kan said.
“Home purchase activity continued its strong run with a 2 percent increase over the week and was up around 22 percent compared to the same week a year ago. While this was still positive news for the purchase market, the gradual slowdown in the improvement in the job market and tight housing inventory remain a concern for the coming months, even as low mortgage rates continue to provide support.”
The refinance share of mortgage activity increased to 65.7% of total applications from 63.9% the previous wk.
The FHA share of total applications increased to 10.4% from 9.6% the wk prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.06% from 3.14%.
The average contract interest rate for 15-yr fixed-rate mortgages decreased to 2.67% from 2.73%.
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