After falling 6.7% the previous week, mortgage application volume increased a remarkable 25.5% on an adjusted basis during the week ended Oct. 2, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, volume increased 26% compared with the previous week.
Applications for refinances increased 24%, while applications for purchases increased 27%.
On an unadjusted basis, applications for purchases increased 27% compared with the previous week and were a whopping 49% higher compared with the same week one year ago.
The refinance share of mortgage activity fell to 57.4% of total applications from 58.0% the previous week.
So, why did volume suddenly spike? There are two reasons: increased volatility in mortgage rates and a push to process as many applications as possible ahead of the implementation of the Consumer Financial Protection Bureau's new TILA-RESPA Integrated Disclosure (TRID) rules on Oct. 3.
‘The number of applications for purchase and refinance mortgages soared last week due both to renewed rate volatility and as many applications were filed prior to the TILA-RESPA regulatory change,’ says Lynn Fisher, vice president of research and economics for the MBA, in a release. ‘The average loan size of applications in the weekly survey increased by 6.9 percent, driven by a 12.1 percent increase in the average size of refinances.’
The average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 3.99%, down from 4.08% the previous week.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 3.89%, down from 3.96%.
The average rate for 30-year FRM backed by the Federal Housing Administration (FHA) was 3.80%, down from 3.87%.
The average rate for a 15-year FRM was 3.24%, down from 3.29%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 2.96%, up from 2.95%.
Looking at application volume by loan type, the FHA's share of total applications was 12.7%, down from 13.8% the week prior. The Veterans Affairs' share of total applications was 9.2%, up from 10.3% the week prior. The U.S. Department of Agriculture's share of total applications was 0.7%, unchanged from the previous week.
All rates are based on closings. The survey covers about 75% of the total residential mortgage market.