Mortgage Applications Survey’s Refinance Index Now 133% Higher Year-Over-Year
The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey posted a solid 8.1% gain for the week ending September 27.
The Market Composite Index is a measure of mortgage loan application volume from one week earlier. On an unadjusted basis, the Index gained 8.0% from with the prior week.
The Refinance Index — which is a more volatile gauge — rose 14% from the prior week and is now up 133% year-over-year.
The less volatile seasonally adjusted Purchase Index ticked up 1.0% from the week prior. The unadjusted Purchase Index also increased 1.0% compared with the previous week and is now 10% higher year-over-year.
“Mortgage rates mostly decreased last week, with the 30-year fixed rate dropping below 4% for the sixth time in the past nine weeks,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Borrowers responded to these lower rates, leading to a 14% increase in refinance applications.”
“Although refinance activity slowed in September compared to August, the months together were the strongest since October 2016,” Mr. Kan added. “The slight changes in rates are still causing large swings in refinance volume, and we expect this sensitivity to persist.”
The refinance share of mortgage activity rose to 58.0% of total applications, up from 54.9% the previous week. The adjustable-rate mortgage (ARM) share of activity rose to 5.5% of total applications.
“Purchase applications also increased and remained more than 9 percent higher than a year ago,” Mr. Kan continued. Low rates and healthy housing market fundamentals continue to support solid levels of purchase activity.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell to 3.99% from 4.02%, with points remaining unchanged at 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The effective rate decreased from last week.