Purchase mortgage application volume rises along with rates
The MBA’s Weekly Mortgage Applications Survey for the week ending Oct. 25 found that the refinance index decreased 1% from the previous week and was 134% higher than the same week one year ago. The refinance share of mortgage activity decreased to 58% of total applications from 58.5% the previous week.
Meanwhile, the seasonally adjusted purchase index increased 2% from one week earlier and the unadjusted purchase index increased 2% compared with the previous week and was 10% higher than the same week one year ago.
“The 10-year Treasury rate rose slightly last week, as markets expected more progress toward a trade deal between the U.S. and China. Mortgage rates increased for the second straight week as a result, with the 30-year fixed rate climbing to 4.05%, the highest level since the end of July,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a press release.
“Mortgage applications were mostly unchanged, with purchase activity rising 2% and refinances decreasing less than 1%. Purchase applications continued to run at a stronger pace than last year, finishing a robust 10% higher than a year ago. Considering how much lower rates are compared to the end of 2018, purchase applications should continue showing solid year-over-year gains.”
Adjustable-rate mortgage share activity increased to 5.2% from 4.8% of total applications and the share of Federal Housing Administration-insured loan applications decreased to 12% from 12.1% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 11.8% from 13.5% and the U.S. Department of Agriculture/Rural Development share increased to 0.6% from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased 3 basis to 4.05%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate increased 5 basis points to 4.01%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 4 basis points to 3.83%. For 15-year fixed-rate mortgages, the average increased 1 basis point to 3.4%. The average contract interest rate for 5/1 ARMs increased to 3.43% from 3.29%.
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