A surge in applications for refinances spurred by the Federal Housing Administration’s (FHA) recent rate cut resulted in total mortgage application volume increasing 0.8% on an adjusted basis during the week ended Jan. 13, as shown by the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
The rate cut helped push applications for refinances up 7% compared with the previous week. Meanwhile, applications for purchases decreased 5% on an adjusted basis.
On an unadjusted basis, total application volume increased 29% compared with the previous week. Applications for purchases increased 25% on an unadjusted basis but decreased 1% compared with the same week one year earlier.
The refinance share of mortgage activity increased to 53.0% of total applications from 51.2% the previous week.
The average rate for a 30-year, fixed-rate mortgage (FRM) was 4.27%, down from 4.32%.
The average rate for a jumbo 30-year FRM was 4.22%, down from 4.27%.
The average rate for a 30-year FRM backed by the FHA was 4.10%, up from 4.08%.
The average rate for a 15-year FRM was 3.51%, down from 3.56%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.44%, up from 3.32%.
The ARM share of activity increased to 5.7% of total applications.
Looking at the government loans, applications for mortgages backed by the FHA represented about 13.1% of all applications – up from 11.7% the week prior. The Veterans Affairs share of total applications was 12.1%, down from 12.8%. The U.S. Department of Agriculture share of total applications remained unchanged at 0.9%.