After increasing a mere 0.8% the previous week, mortgage application volume increased 4.7% on an adjusted basis during the week ended July 31, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, volume increased 5% compared to the previous week.
Applications for refinances increased 6% and applications for purchases increased 3%.
On an unadjusted basis, applications for purchases increased 3% compared to the previous week and were 23% higher compared to the same week one year ago.
‘Despite recent concerns about the economy, both purchase and refinance applications increased strongly in response to lower interest rates last week,’ says Lynn Fisher, vice president of research and economics for the MBA, in a release. ‘Refinance activity was the highest since May when rates were last at this level. The increase in purchase activity was also notable for this time of year – up 23 percent relative to a year ago.’
The refinance share of mortgage activity increased to 51.3% of total applications from 50.6% the previous week.
Driving the increase, of course, was a slight dip in fixed mortgage rates that started two weeks ago.
According to the MBA's data, the average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.13%, down from 4.17% the previous week.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 4.08%, down from 4.12% the week prior.
The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 3.96%, down from 3.98%.
The average rate for a 15-year FRM was 3.36%, down from 3.39%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.02%, down from 3.04%.
The ARM share of activity increased to 6.8% of total applications.
All rates are based on closings.
Looking at application volume by loan type, the FHA's share of total applications was 13.8%, up from 13.7% the week prior. The Veterans Affairs' share of total applications was 10.5%, down from 10.9% the week prior. The U.S. Department of Agriculture's share of total applications was 0.8%, down from 0.9% the week prior.