Applications for Refinances Jump 8 Percent on Lower Rates

0

Driven by an 8% increase in refinance volume – resulting from another drop in mortgage rates –  total mortgage application volume increased 4.6% during the week ended Oct. 2, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.

Applications for purchases decreased 2% compared with the previous week.

Year over year, applications for refinances were up 50% and applications for purchases were up 21%.

On an unadjusted basis, total volume increased 5% compared with the previous week.

“Mortgage rates declined across the board last week – with most falling to record lows – and borrowers responded,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “The refinance index jumped eight percent and hit its highest level since mid-August.

“Continuing the trend seen in recent months, the purchase market is growing at a strong clip, with activity last week up 21 percent from a year ago,” Kan says. “The average loan size increased again to a new record at $371,500, as activity in the higher loan size categories continues to lead growth.

“There are signs that demand is waning at the entry-level portion of the market because of supply and affordability hurdles, as well as the adverse economic impact the pandemic is having on hourly workers and low-and moderate-income households,” he adds. “As a result, the lower price tiers are seeing slower growth, which is contributing to the rising trend in average loan balances.”

The refinance share of mortgage activity increased to 65.4% of total applications, up from 63.3% the previous week.

The adjustable-rate mortgage (ARM) share of activity remained unchanged at 2.2%.

The average rate for a 30-year fixed-rate mortgage, based on contract signings, was 3.01%, down from 3.05%.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments