Mortgage application volume increased 8.1% on an adjusted basis last week, led by a surge in applications for refinances driven by lower rates, the Mortgage Bankers Association’s (MBA) Weekly Applications Survey shows.
For the week ended September 27, applications for refinances jumped 14% and were 133% higher compared with the same week one year earlier.
Applications for purchases increased 1% compared with the previous week.
On an unadjusted basis, total volume increased 8%. Applications for purchases were up 1% on an unadjusted basis and were 10% higher compared with the same week one year earlier.
“Mortgage rates mostly decreased last week, with the 30-year fixed rate dropping below four percent for the sixth time in the past nine weeks,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Borrowers responded to these lower rates, leading to a 14 percent increase in refinance applications.
“Although refinance activity slowed in September compared to August, the months together were the strongest since October 2016,” Kan says. “The slight changes in rates are still causing large swings in refinance volume, and we expect this sensitivity to persist.”
“Low rates and healthy housing market fundamentals continue to support solid levels of purchase activity,” Kan adds.
The refinance share of mortgage activity increased to 58% of total applications, up from 54.9% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 5.5% of total applications.
The average rate for a 30-year fixed-rate mortgage was 3.99%, down from 4.02%.