With mortgage rates continuing to hover near record lows, mortgage applications jumped 3.8% last week according to a report from the Mortgage Bankers Association (MBA).
The refinance wave showed no signs of stopping as refinance activity gained 6% from the previous week – up 88% higher than the same week last year. According to Joel Kan, MBA’s associate vice president of economic and industry forecasting, borrowers made a grab for both conventional and government refi’s.
“The drop in rates spurred an uptick in demand for refinances,” Kan said. “Mortgage rates continue to hover at record lows this fall. The 30-year fixed mortgage rate remained essentially unchanged at 3.01 percent last week, but rates for 15-year fixed-rate loans, FHA loans and jumbo loans all fell to new MBA survey lows.”
Refinancing’s share of mortgage activity also continued to climb last week and surpassed the two-thirds share the week prior as refi’s rose to 68.7% of total applications.
Purchases, on the other hand, slowed for the fifth time in six weeks, falling 1% on a seasonally adjusted basis. However, purchase applications are 25% higher than the same week a year ago, and have increased year-over-year for six straight months.
Despite volatile conditions like heightened unemployment rates, increased home prices and an adverse market refinance fee, Black Knight estimated over $4 trillion in mortgage origination volume by the end of 2020 with record levels across purchase and refi.
Here is a more detailed breakdown of this week’s mortgage application data:
- The FHA’s share of mortgage apps fell to 11.1% from 11.7%.
- The VA share of applications increased to 12.2% from 11.4%.
- The USDA share of total applications remained unchanged at 0.5% from the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.01% from 3%.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) fell to 3.18% from 3.28%.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 3.08% from 3.14%.
- The average contract interest rate for 15-year fixed-rate mortgages fell to 2.55% from 2.6%.
- The average contract interest rate for 5/1 ARMs fell to 32.67% from 3.05%.
