After falling 7.0% the previous week, total mortgage application volume increased 13.9% on an adjusted basis during the week ended Sept. 18, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, applications increased 26% compared with the previous week. Helping to drive the week-over-week increase was the fact that Labor Day fell in the previous week. In addition, a slight drop in mortgage interest rates helped boost applications for refinances.
Applications for refinances increased 18%, while applications for purchases jumped a remarkable 9%.
On an unadjusted basis, purchases increased 20% compared with the previous week and were 27% higher than the same week one year ago.
‘We saw significant rate volatility last week surrounding the [Federal Open Market Committee] meeting, and rate declines toward the end of the week likely drove applications from both prospective home buyers and borrowers looking to refinance,’ explains Mike Fratantoni, chief economist for the MBA, in a statement. ‘The 30-year fixed rate remained unchanged over the week even though there was substantial intra-week fluctuation, but we saw rate decreases in other loan products like the 15-year, fixed, 5/1 adjustable-rate mortgage (ARM) and 30-year jumbo.’
The refinance share of mortgage activity increased to 58.4% of total applications from 56.2% the previous week.
The average rate for a 30-year, fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.09%, unchanged from the previous week.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 3.99%, down from 4.04% the previous week.
The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 3.88%, unchanged from the previous week.
The average rate for a 15-year FRM was 3.31%, down from 3.33%.
The average rate for a 5/1 ARM was 2.95%, down from 3.04%.
The ARM share of activity increased to 6.9% of total applications.
Looking at application volume by loan type, the FHA's share of total applications was 12.9%, down from 14.2% the week prior. The Veterans Affairs' share of total applications was 10.0%, down from 10.7% the week prior. The U.S. Department of Agriculture's share of total applications was 0.7%, down from 0.8% the previous week.
All rates are based on closings. The survey covers about 75% of the total residential mortgage market.